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^ON-TAP

Sip your ☕, unfold the 📰 – Simplified stock market analysis served during Sunday's sunrise. 🌅

• Top interesting tweets of the week

• Doing the basics for financial growth - Financial Edu.

• Marker Analysis into 2024 - Two-sided story + Stocks during an Election Year

• Investors Lab - $BABA

• Last week’s trading/investing activity.

• Top trading setups and levels for the week (updated daily)

• Stock Market Investing Course! (NEW!)

• Missed our midweek read? Read here!

💡Interesting Posts of the week:

Fake Gurus: Don’t fall for this trap!

This is a very important chart for investors heading into 2024!

^{Education- General Finance}

Financial Growth in 2024

You can’t be a good trader or investor if you can’t do the basics. In fact, it will be hard to ever get comfortable with money if you don’t do this going into 2024.

1. Create a Budget: Start the new year by creating a realistic budget. Understand your income, expenses, and savings goals. Use tools and apps to help you track your spending and stay within your budget. Download Personal Budget Tracker or watch a video here!

2. Emergency Fund: Prioritize building or replenishing your emergency fund. Aim for at least three to six months' worth of living expenses. An emergency fund provides a financial safety net for unexpected situations.

3. Debt Management: Develop a strategy to manage and reduce any existing debts. Prioritize high-interest debts and consider debt consolidation options. Aim to pay more than the minimum amount due to accelerated debt repayment.

4. Investing Basics: If you're new to investing, take the time to learn the basics. Understand different investment vehicles, risk tolerance, and diversification. Consider consulting a financial advisor for personalized advice.

5. Retirement Planning: Assess your retirement savings and contributions. Maximize contributions to employer-sponsored retirement plans, such as 401(k)s or similar options. Explore additional retirement savings options like IRAs.

6. Educate Yourself: Stay informed about financial news, investment trends, and personal finance strategies. There are numerous resources online, including reputable financial websites, books, and podcasts.

Others:

Insurance Review:
Tax Planning:
Automate Savings:
Review and Set Financial Goals:
Credit Score Check:

^{Economic Insights & Market Analysis}

It’s an Election Year. How do stocks react?

A two-sided story

The bullish theory

The market is doing something many have not seen before: A pivot for the betterment of the economy. The Fed is taking action and promising nearly 5 rate cuts by the end of 2024. With the Fed pivoting, which is currently positively influencing stocks, it seems like we are in the clear. For context, SPX is currently trading at 4750 and will close the year with a return above 20%

If people were bullish on stocks when the general public was bearish on the economy, what happens when people get extra bullish on stocks and bullish on the economy?

Well, here are some thoughts:

1. Market Overvaluation: Excessive bullish sentiment can lead to overvaluation of stocks. Investors may become overly optimistic about future earnings and economic growth, causing stock prices to rise to levels that are not supported by fundamentals or technical chart indicators

2. Risk of a Bubble: Overconfidence and excessive optimism can contribute to the formation of asset bubbles. When the bubble bursts, it can lead to sharp declines in stock prices. What is a bubble? Read more.

3. Elevated Volatility: Contrary to the belief that a bullish market is always calm, excessive optimism can lead to increased volatility. Sudden shifts in sentiment or unexpected events can trigger rapid and sometimes unpredictable price movements.

4. Potential for a Correction: If the market becomes excessively bullish, it may be vulnerable to a correction. A correction is a temporary reversal in the market trend, typically characterized by a 10% or more decline in asset prices. This can be a healthy adjustment to more sustainable levels.

5. Rising Interest Rates: Strong economic optimism may lead to expectations of higher interest rates. Central banks may respond to a robust economy by raising interest rates to prevent overheating.

Let us simplify this for those who need it.

The bearish theory:

Alright, imagine interest rates are like the cost of borrowing money. When the economy needs a boost, central banks may cut interest rates to make borrowing cheaper.

This encourages people and businesses to spend and invest more, leading to economic growth. If the central bank cuts rates quickly and everyone becomes overly optimistic, they might pay too much for stocks, creating a risk of a bubble.

To prevent this, central banks might decide to change their strategy, possibly by pausing or reversing rate cuts, especially if there are concerns about inflation or an overheating economy.

In your opinion, do you think the Fed is being overly optimistic?

Investors Lab

Alibaba ($BABA) Reshuffle

Competitors PDD U.S.-listed shares have gained more than 80% so far this year, driving the company’s market capitalization higher than Alibaba’s. In contrast, the company founded by Jack Ma has seen its shares fall by about 14% year to date.

• Temu's parent company, PDD Holdings, is currently more valuable than Alibaba. (As of December 10)

• EO Eddie Wu is taking over Taobao and Tmall e-commerce business

• During Alibaba’s previous earnings call, the company mentioned plans to monetize its non-core assets.

• Zhang said the decision to step down was part of his own plan.

  • Zhang’s intentions to only focus on cloud now have been some years in the making.

  • In an interview with CNBC in 2018, Zhang said cloud computing will be the company’s “main business” in the future, underscoring his bullishness regarding the technology.

  • Read the full memo Zhang sent to Alibaba employees HERE

Despite the news, $Baba may still undervalued from a long-term investor's point of view. (Did we buy $baba? You can find out here!)

^{DISCORD / TELEGRAM TRADE RECAP}

Premium Daily Insights

Stocks mentioned in our Daily Analysis

$FDX
Trade is still pending. (view what is it)

/ES pivot of 47XX (view last week’s pivot level)

Discord/Telegram Alerts
(results)

Get Buy/Sell Alerts

Golden Play:
$SPX 4700p
Bought for $95 and took a profit of $1,239. +1,200% return!

Others:
$SQ 90c (Took another trim today since they don’t expire until March 2024)
Bought for $36 & took a partial profit of $400. + 1011% return!

$FDX 262c
Bought for $58 dollars & took a partial profit at $80, was stopped out of remainder at entry. +15% return!

$SPY 469p

Bought for $77 and did the first trim at $135. Sold more at 1.50 and held stops at entry. A little under 100% return.

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