Seasonal Context & Events
Earnings season is officially in the rearview mirror, and we’re heading into the final stretch of the month—and the quarter. That means the usual dance of monthly cash inflows and outflows could start to make itself felt, as funds and portfolios do their end-of-quarter shuffling.
The 24th will see markets open until 18:00 UTC, and then they’ll be closed on the 25th for Christmas. A rare pause in the chaos—enjoy it while it lasts. Oh, and no options expiration this week, so at least one source of drama is off the table. Don’t worry, though—markets will find other ways to keep things interesting.
Key events include:
26th December at 13:30 UTC Initial Jobless Claims
Those events may or may not influence the opening direction and subsequent days.
Thermometer
Breadth
| Ratio | 0.14 |
| Line | -370 |
| Thrust | 0.15 |
More bearish than bullish I would say.
Put/Call Ratio
| OI | VO |
| 1.34 | 1.48 |
| 1.60 | 1.29 |
Still, looking down.
Coherence
| SP500 | -2.19% |
| RUT | -4.37% |
| DJT | -4.80% |
Coherent, panic, not moving.
Support & Resistance Levels
| R3 | 6128 |
| R2 | 6015 |
| R1 | 5993 |
| Close | 5930 |
| S1 | 5886 |
| S2 | 5827 |
| S3 | 5783 |
Wrap Up & Forecast
I’m warning you upfront—this is going to be longer than usual. Did you see that coming? If so, congratulations, you’re already ahead of most market amateurs.
Let me just say this: only non-professionals will proudly declare, “I knew that.” The truth is, whether you’re into technical analysis, fundamental analysis, or just flipping coins, all forecasts are based on current trends, metrics, and projecting past data into the future. That’s how forecasting works. But pretending you could predict a 2.95% drop in less than two hours before the close? That doesn’t make you an expert—it makes you a market amateur.
Big moves like this have happened maybe 10–12 times in the past 50 years. So sure, keep telling yourself you saw it coming. What you likely predicted was the direction, not the sheer magnitude. And that’s fine! But please spare me the “I knew it!” bravado—it’s tiresome, and frankly, you didn’t see anything. The correction aligned with your broader view, sure, but the scale? Entirely out of your league.
I had to get that off my chest because, honestly, the thing I dislike most about markets isn’t the volatility or even the uncertainty—it’s the participants. Yes, I get it: without participants, there wouldn’t be markets. But does it have to be these participants?
A few curiosities for you:
- I left the red lines on the charts from the gap-up on November 6th for a reason—they’ve proven to be excellent support and resistance levels. Not everything is noise, after all.
- The Market found support around $5870, which (interestingly) coincides with the calculated Maximum Pain level for options expiring in December. Good news for options writers, but not so much for anyone who expected a predictable market this time of year. Lesson: predictability and December don’t mix.
- Speaking of that gap-up, here’s a fun stat: the index has made similar moves (gap-ups of that size) 3 times since 1960. The last one? 1984. Here’s the kicker: it never closed. The previous one? Closed after 4 days. Will it hold this time? So far, the answer seems to be yes.
So, there you have it—some food for thought and, hopefully, a bit of perspective. And no, I won’t blame you if you still claim you knew it all along. Just don’t expect me to believe you.
Apart from the panic, what actually happened? A day down and a day up, choppy as per previous forecast (nah I did not expect the magnitude)—that’s all. The market found support at the November 6th gap (right at the middle of it) and bounced right off it. Nothing revolutionary.
Now, let’s talk about one of my favorite market quirks: end-of-year tax-loss selling. Every year, people rush to dump their losers to save a bit on taxes. And honestly, it cracks me up every time. Personally, I can’t wait to pay a massive tax bill—that would mean I crushed it this year. Like Mr. Shoaff urged Jim Rohn to become a “happy taxpayer” (check out 7 Strategies for Wealth & Happiness if you’re curious), I’m proud to say I’m a happy taxpayer too.
What they do with the money? Not my concern. I’ve agreed to live in this society, and paying taxes is part of the deal. If I have a problem with it, I can always move to the jungle and live off the grid. Nobody’s stopping me. As for the classic “The goose that lays the golden eggs eats too much” argument—sure, maybe the goose is overeating, but I’m not here to do politics. I take responsibility for my actions and move on.
Back to the sellers—did they already unload their losers during the panic? Maybe some did. Others might have been waiting for the bounce to make their move. That bounce could fizzle out by the 24th, opening the door for another wave of selling, which might even carry into next week. And after that? Well, then we’ll see. I do notice some repetitive behavior in the chart below, but I won’t draw it this time (or maybe I did draw it). Well, should I have drawn it last week? Maybe I did—and just uploaded the wrong chart. Will happen the same again and with the same magnitude? Maybe and not.
