Daily Brief - ☀️ The bullish case

TLDR: Bears might be selling an overbought chart without a complete understanding of what’s driving the rally. Let’s analyze the bullish case.

As we mentioned often in our Leading Indicator email, this is a market that screams “short me”, so it’s understandable that traders pile in to profit on the drop - drop which has failed to materialize so far.

As they say in poker, if you don’t know who’s the dumb guy at the table then it’s likely you are the dumb player. If you are baffled by market action, take a step back and try to look at the other side of the story.

Yesterday we talked about the bearish case, today let’s discuss the bullish case:

• Benign inflation. The benign inflation spells the end of the hiking cycle, now it’s a matter of when will we see the rate cuts
• Good earnings. Earnings are doing mighty fine, we even have a short-term catalyst with NVDA
• Short squeeze. Positioning squeezed back into negative after finally reaching positive since July 2022, the market is full of shorts
• Solid economy. The economy is trudging along and employment is stable
• Few overbought stocks. Only a few stocks are at the peak of the market, the rest are mid-range
• Year end rally. Never underestimate seasonality.

Is this enough to justify the rally? Well there’s certainly plenty to fuel the market up to 4,600.

If you’re a bear, be patient. There will come a chance.

What's happening in the markets?

This section is powered by Open AI connected to TOGGLE AI

The retail sector is currently experiencing a surge in earnings, with notable performances from key players.

Bitcoin has exhibited remarkable performance this year, with a noteworthy 117% increase year to date, rebounding from lows of approximately $16,000 in January. Despite this positive trend, the decentralized digital currency experienced a setback yesterday, losing nearly 5% of its value.

This decline was attributed to the liquidation of over $307 million in leveraged crypto long positions as Bitcoin approached the $38,000 mark. Interestingly, Toggle pointed out that some on-chain metrics for Bitcoin were at elevated levels, historically signaling potential downside.

Despite this caution, the majority of Toggle's recent insights on BTCUSD have been optimistic. A particularly noteworthy 7-star insight from October 27th emphasized that Bitcoin's transaction value had recently reached a low point, historically preceding an uptrend over the next six months.

Additionally, a surprising dip in October's inflation reading has led to significantly lower yields, creating a more supportive environment for risk assets, including Bitcoin.

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Earnings Update: Trip.com reports on Monday

Trip.com Group is one of the world's largest online travel agencies. Toggle highlights that this time of the year tends to be positive for the company but its valuation levels are also near historic lows.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.

Asset Spotlight: Price jump in Workday stock

Toggle analyzed 12 similar occasions in the past where Workday stock's price jumped and historically this led to further median upside in the stock over the following 6 months. Read full insight!

General Interest: Apple caved in on iMessages

You got to love the EU.

First they forced Apple to use USB-C ports. Now, it’s the time for messages.

Apple says that, in 2024, the iPhone will add support for RCS messaging, the newer standard used by most Android phones, according to a report from 9to5Mac.

But non-iMessage messages will remain green, maintaining the distinction between Apple users and Android ones. If you don’t know why it is important, google “tinder green bubble”.

Read more here on The Verge.