Summing Up The Week

The markets were turbulent this week as President Donald Trump and his administration finally started to appear to take COVID-19, the novel coronavirus, seriously.

From estimates of potentially 250,000 U.S. with proper precautions taken, a somber mood overtook the entire week. Bad news followed with an additional 6.6 million unemployment claims and a small business assistance program having trouble getting off the ground.

Let’s look at the news that moved the markets this week…

Market News

Johnson & Johnson ID’s lead vaccine candidate

Johnson & Johnson (JNJ) announced that it has identified a leading vaccine candidate for the COVID-19 coronavirus on Monday, reported TheStreet.com.

The company believes it will start seeing valid final results from trials as soon as December 2020 with emergency batches of vaccine potentially being available as early as January 2021 with more than one billion batches available by the end of next year.

Dow & S&P 500: “Worst… Q1… EVER!”

The Dow Jones Industrial Average (DJIA) and Standard & Poors 500 (SPX) closed out March with both indexes’ worst-ever first quarters, reported CNBC on Wednesday.

For the Dow, it was its worst quarter since 1987 and the S&P 500 saw its biggest quarterly loss since the Financial Crisis in 2008.

Goldman Sachs (GS) forecasts that the economy will go through an “unprecedented plunge” in Q2, but also sees a recovery that will be the fastest in history.

Only time will tell…

Trump Projects 100K-240K in U.S. COVID-19 Deaths

President Donald Trump’s White House projected between 100,000 and 240,000 deaths in the United States from the coronavirus, reported CNBC on Tuesday after the markets closed.

“This could be a hell of a bad two weeks,” said Trump in a press conference. “This is going to be a very bad two, and maybe three weeks – this is going to be three weeks like we’ve never seen before.”

The U.S. has more coronavirus cases than any other country in the world at 184,000 confirmed as of Tuesday evening.

Jobless Claims Double to 6.6 Million

Initial jobless claims doubled to more than 6.6 million in the past week according to the Labor Department on Thursday, reported CNBC.

When combined with last week’s numbers, the total number of unemployed due to the coronavirus-induced shutdown is nearly 10 million.

Stock market futures rolled over following the report before the markets opened on Thursday.

Next Week’s Gameplan

The markets are holding up pretty well from their bounce off of the epic lows from two weeks ago, however, there’s no reason to expect them to stay here.

Medical experts and epidemiologists forecast that the worst of COVID-19 will hit the U.S. sometime next week, and the results will be unlike anything anyone in the world has seen before.

Next week’s gameplan?

I plan to continue following the trading plan for my positions, and adding in small quantities if they drop to key levels. If the market continues to hold these levels, then I’m just sitting on my hands.

This Week in Play

Stay tuned for this week’s episodes of my two portfolios Investments in Play and Speculation in Play coming online later this weekend! 

Crytpo Corner

Bitcoin Price Action

While Bitcoin looks like it remains unchanged from last week, it was actually quite a turbulent week with the crypto making a higher weekly-low at $5853.00 (orange horizontal line) on Sunday-Monday right on the Next Support of Last Resort (?) trendline (in blue) before jumping to a higher weekly high on Thursday (green horizontal line) at $7292.11.

The monthly low of $3858.00 (red horizontal line) still looms menacingly with a new potential support line, the Some Support of Any Resort coming in purple.

The Bullish Case

A higher weekly low followed by a higher weekly high is actually quite the Bullish trend reversal. Day traders (and even long-term traders) will say that when an asset flips from lower-lows and lower-highs to higher-lows and higher-highs then you’ve got a Bull case.

The Bearish Case

The Bear Case still remains the one that’s plagued all asset markets – COVID-19. While the argument could be made for Bitcoin’s independence of any nation’s economy, the reality is that speculative retail investors could pull their funds not out of lack-of-faith, but simply the need to buy necessities like food in their only native currency.

We should see some action next week as COVID-19 reaches its peak in the U.S.

Bitcoin Gameplan

Current Allocation: 10.227%
Current Per-Coin Price: $4,833.84
Current Status: +38.23%

I took the opportunity to continue lightening up my position in very small increments as Bitcoin broke through $7000, lowering my per-coin cost negligibly by -0.95% from $4879.84 to $4833.71, but also freeing up capital to add at lower levels should we see Bitcoin try to test its 2020 low of $3858.00.

Bitcoin Buying Targets

Based on past support levels, Moving Averages (both Simple and Exponential), and a positively terrifying past trendline, I’ve come up with the following buy targets:

0.277% @ $4023
0.553% @ $3917
3.331% @ $3216
3.114% @ $2989
6.017% @ $2653
8.735% @ $2089
11.433% @ $1777
22.658% @ $1388
33.654% @ $1091

Bitcoin Selling Targets

For the moment, I’m going to continue the approach of taking small profits as Bitcoin makes higher-highs and stabilizes. If Bitcoin makes enough of a stab at $10,000, I may use stop-limit orders to close the entire trade with those sorts of gains on the table.

Why the differing quantities at each level instead of a flat percentage?
Rather than buying an equal percentage, I change my buying quantity at each stage as a reflection of how likely Bitcoin could bottom and rebound from that stage. Rather than increasing my quantity on the way down, I’m used a fixed amount of money, so I’m basing how much I buy by how likely I think Bitcoin will drop to a certain level. In this case, I don’t think it’s likely Bitcoin will be able to break its $3128 low, so my quantities under that price point are less to account for the chances it will get to them.

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.
While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (sometimes a drop of near -90% or a gain of up to +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are just a few recent price movements over the past couple of years:

• Bitcoin rose +2,707% from its January 2017 low of $734.64 to make an all-time high of $19,891.99 in December of the same year.
• Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
• In the first half of 2019, Bitcoin rebounded +343% from $3128.89 to $13,868.44.
• From June 2019, Bitcoin dropped -53.64% to a low of $6430.00 in December 2019.
• From December 2019’s low, Bitcoin rebounded +64% from $6430.00 to $10,522.51.
  
• In March 2020, Bitcoin dropped -63.33% to a low of $3858.00, mostly in 24 hours
• From $3858.00, Bitcoin has rebounded +73.19% to $6681.53.
• Where will Bitcoin go from here? Truly, anything is possible.

What if Bitcoin’s headed to zero?
The only reason I speculate in the cryptocurrency space is I truly believe Bitcoin isn’t headed to zero.

I am prepared for that possibility, however, by knowing I could potentially lose all of the capital I’ve allocated to this speculative investment. Professional advisers recommend speculating with no more than 5% of an investor’s overall assets. Personally, I’ve allocated less than 2% of my assets to speculating in crypto.

I feel that anyone who doesn’t believe in the long-term viability of cryptocurrency would be better served not speculating in the space.

On a good day, this asset class isn’t suitable for those with weak stomachs. On volatile days, the sector can induce nausea in the most iron-willed speculator.

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.