Summing Up The Week
The market really hit one bullseye after another this week, threading the needle with economic news not good enough to make the Fed consider raising interest rates but, at the same time, not bad enough to make investors terrified of an incoming recession.
Job reports, housing, 401(k) plan upgrades and so much more! Read the news that moved the markets this week below…
And YOU get a job, and YOU get a job…
Friday’s employment report was the “Goldilocks”of jobs numbers, CNBC reported. 196,000 jobs were created in March, comparatively better than February and taking the three-month average for 2019 to 180,000 jobs a month. The number of jobs created was good enough to eliminate concerns of a recession, yet not so good to make the Fed want to raise rates – in other words, as Goldilocks would say, it was just right.
Who Wants a Raise?
The Private Payroll Report came in weak on Wednesday, reporting a growth of 129,000 for March versus an expected 173,000 reported CNBC. Despite the indication of a slower-growing economy typically a bad sign for the economy, the market indexes continued working higher for the day.
401(K) Upgrade – Government to the Retirement Rescue!
In light of a “retirement income crisis” i.e. “Americans aren’t saving for retirement,” a House committee passed the Secure Act on Tuesday, a bill to improve access and increase the flexibility of 401(k) retirement plans.
CNBC reports that the bill contains a number of provisions to encourage small businesses to provide retirement benefits to their workers such as the ability for small businesses to join together in order to offer more effective retirement plans.
Globalization Proven with Positive Chinese Manufacturing Data
If there was ever a sign we’re all in this together as a global market, the U.S. stock market reacted positively to China’s unexpectedly expanded manufacturing activity from March, reported by CNBC on Monday.
Even in the midst of a trade war, both countries’ stock markets have been rising when the other country reports good news.
Housing Market Trying to Rebound?
Weekly mortgage applications and refinances increased 18.6% and 39%, respectively, reported CNBC on Wednesday. With interest rates at low levels, these numbers could indicate an increase in the housing market, however the slower growth indications about the global economy could counteract the positive benefits. Are homebuyers actually returning to the markets or are people simply capitalizing on low interest rates where it works for them? Time will tell on this one.
If you’re reading this, you’re in the Top 25%
The majority of Americans manage their own money without financial help or advice with 75% “winging it” and receiving no help, CNBC reported on Tuesday. Only 17% of the 2,300 respondents in CNBC’s survey said they use a professional adviser.
The Stanford Center recommends individuals put away 10-17% of their income in order to retire at 65 which, according to CNBC’s report, is double what most Americans are actually saving for retirement. If you have not consulted with a professional adviser, Get Irked recommends you do so to ensure you’re on the right track for your future saving goals.
Get Irked is not a professional adviser, we’re a free site sharing our own experiences.
All investments carry risk. Check with a professional before taking part in any investment.
Next Week’s Gameplan
Investing can often seem like the slow boring of hard boards with the market grinding slowly upward and the constant fears of a pullback looming at every corner.
We’re adjusting our gameplan to put more funds to work on small pullbacks while still keeping funds on the sidelines in case we see another 20% whopper like December.
Monday’s move has given us two forecasts for Bitcoin – Bullish and Bearish.
Bitcoin Price (in USD)
$100M Order = Bitcoin 20%+ Gain in an Hour!
As a demonstration of both how volatile and how easily manipulatable Bitcoin and the cryptocurrency markets are, Bitcoin shot up more than 20% in less than one hour on Monday from $4173 to $5121, even crossing The Line That Shall Not Be Crossed at one point.
Although no explanation was available at the time of the surge, analysts later pointed to an order of 20,000 BTC worth $100 million USD as the cause of the rush to the upside.
Is this the End of the Bitcoin Bear Market?
Thanks to the sudden surge in Bitcoin prices, the entire cryptocurrency market saw significant upside moves during the week, with analysts theorizing this order as the end of the bear market and traders returning to the space in droves due to – say it together with us now – FOMO!
For Get Irked, this resurgence certainly paints some much-needed bullish news on the sector and could potentially signify that the $3,128 price point set in late 2018 is the new bottom for Bitcoin for this round. The conversion of The Line That Shall Not Be Crossed into support rather than resistance still hasn’t happened, although this move may indicate further upside if consolidation is healthy without a 30%+ pullback.
Unfortunately, with a move this large happening so quickly on news with very little follow-through (this was, after all, a single order), there’s a significant possibility that Bitcoin has simply set a new range with $5345 as its new high and $3128 as its low.
Even professional analysts will say “Technical Analysis is more art than science” as the practice attempts to apply logical patterns to an often-illogical market. Taking this week’s move into account, the above chart shows two possible channels for Bitcoin:
- Bullish (in green): The bullish forecast shows a channel of potential upside movement with the top line showing the high end of the range (resistance) and the bottom line showing the low end of the range (support) which we’ve nicknamed “The Support of Last Resort” in past charts.
- Bearish (in red): The bearish forecast shows a channel of downside movement with the top line representing The Line That Shall Not Be Crossed, and the bottom line indicating potential lower lows beyond the $3128 bottom of 2018.
Is Bitcoin a “Money Vacuum?”
Conspiracy theorists suggest that a consortium of wealthy investors could move Bitcoin’s price dramatically – both up and down – to entice bulls and bears to put money into the space.
The theory is that Bitcoin and cryptocurrencies are “Money Vacuums” – sucking in funds for to the consortium by attracting both buyers and sellers with big moves, then pocketing the new money from both the longs and the shorts by moving the price to such extremes in both directions that stop-loss orders trigger or traders simply take their losses and exit the space entirely.
This theory can certainly feel credible during moments when Bitcoin rockets or plummets 20% or more in just a few hours. However, in recent months, volatility has dropped to all-time lows as sentiment dropped with the sector’s values.
How could a consortium restart volatility? How about injecting a sudden influx of funds in the form of a huge Over-The-Counter (OTC) order for Bitcoin?
Just like what happened on Monday.
An order for 20,000 BTC will always move the crypto markets higher as supply drains in order to fill the order, causing a 20%+ gain and tempting bulls to return to the space to capture the upside and bears to come back and push down the fresh high prices.
Monday’s price action was a boon for the bulls, to be sure, however traders must remember that for every trade there is trader on the other side – many traders going short on Bitcoin into the move had their faces ripped off as Bitcoin blew past any expected points of resistance by a historically (at least recently) unexpected amount of volatility.
As always, all traders must take risk into their planning when considering any investment, especially those in the cryptocurrency space.
For every trade, there is both a buyer and a seller.
For every winner, there must also be a loser.
Believe it or not, Get Irked is Bullish on Bitcoin
Get Irked plays the crypto market with a bullish lean by using very small trades with a high probability of profitability success, and we then keep any profits in crypto rather than converting them back to USD.
By keeping only our profits in crypto, we are building up a long-term portfolio of cryptocurrency in order to see exposure to the insane upside moves in the space while simultaneously keeping our investing capital safe from the equally explosive downside moves the space is also known for.
Cryptocurrency is the most volatile asset class Get Irked has ever been involved with, so, along those lines, our strategy has been incredibly conservative. We use wide ranges in an effort to capture unexpected 20% moves as well as very small position sizes to protect our capital. In addition we have less than 1% of our entire portfolio allocated to trading crypto (0.68%, in fact) and 88% of that allocation is in cash at the moment.
The traders in the many books we’ve read all agree on one tactic regardless of their trading style: Risk Management is the most important element of trading. One trader even suggests that investors keep starting positions so small that it feels like a waste of time. We utilize this tactic in our crypto trading.
Although small positions can feel worthless after big upside moves, by using small positions traders limit the downside exposure but have the freedom to add to the position after an upside move sees confirmation to capture even more upside.
Risk management is always the priority in any asset class. Traders must protect their investing capital so they can survive to trade again in the future.
For those interested in speculating in Bitcoin (or any investment, crypto or otherwise), we recommend speaking with a professional investment adviser and trading with small positions to keep risk at an absolute minimum while also allocating an incredibly small amount your overall investment portfolio to such a speculative space.
Get Irked also recommends only trading on Coinbase Pro. Despite having fees for all accounts without $50 million in monthly trading volume, Coinbase Pro is insured against loss in USD funds (not crypto) and also allows users to transfer crypto assets off the exchange for holding in personal crypto wallets.
If you use our referral link to sign up for Coinbase Pro, both you and Get Irked receive $10 USD once you’ve traded a total volume of $100.00.