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The Standard and Poors 500 index (SPX) closed today at 6932, up 134 points for a gain of 2%. SPX opened the week at 6917, setting up a weekly gain of 0.2%. SPX broke down through the 50 dma yesterday but recovered that line very strongly today. Trading volume ran above average for the week.
VIX, the volatility index for the S&P 500 options, spiked up over 23% yesterday, opened this morning at 21.2%, and declined all day to close at 17.8%. Today’s close remains relatively high but the move lower was dramatic.
I monitor the movement of high beta stocks by tracking the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB. SPHB gapped open this morning and closed at 123.0, up over five points or +4.4%. SPHB opened the week at 123.5, setting up a weekly gain of 0.4%. Trading volume was above average from Wednesday on. SPHB broke its 50 dma yesterday but nearly reached its recent high today.
The NASDAQ Composite index closed today at 23,515, down 15 points or
-0.06%. NASDAQ opened the week at 23,517, setting up a weekly loss of 0.3%. NASDAQ’s trading volume has been quite low since mid-December but finally ran above the 50 dma all week.
The Stock Trader’s Almanac calls the three January indicators for the year the January Trifecta. The Santa Claus rally (the last five trading days in December plus the first two trading days in January), failed this year with a decline of 0.03% on the S&P 500. The first five days of trading in January was positive at +0.6%. A positive first five days of January has an 83% correlation over the past 48 years with a positive market for the year. The January barometer, the entire month's trading results, was saved by today’s huge move (up 0.8% for the month). This leaves us with two of the key technical indicators pointing to a positive year in this year’s market. When all three indicators are positive, the S&P 500 has been for the year up 91% of the time; when only two indicators are positive the success rate of this prediction drops to 61%.
The economic data have been generally solid and growing. But the market has been very volatile. In my opinion, this is principally due to the extreme political uncertainties we face today. The large institutions and hedge funds are easily spooked, as they were this week. But they quickly recover and trade higher. I count 6 cycles on the S&P 500 chart since early October. This market reminds me of my favorite metaphor for the market: We small retail traders are like mice running through a stampede of elephants. Don’t be spooked. Follow your rules. Discipline is crucial.
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The Standard and Poors 500 index (SPX) closed today at 6940, down 4.5 points for a loss of 0.06%. SPX opened the week at 6944, essentially unchanged for the week. Trading volume spiked today after running flat since 12/22.
VIX, the volatility index for the S&P 500 options, closed today at 15.9% after opening the week at 16.1%. VIX spiked up to 18% intraday on Wednesday.
I monitor the movement of high beta stocks by tracking the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB. SPHB closed at 122.8 today, down less than a point or -0.5%. SPHB opened the week at 122.0, setting up a weekly decline of 0.7%.
The NASDAQ Composite index closed today at 23,515, down 15 points or -0.06%. NASDAQ opened the week at 23,517, setting up a weekly loss of 0.3%. NASDAQ’s trading volume has been quite low since mid-December but finally ran above the 50 dma all week.
The overall market has traded higher since New Year’s and the S&P 500 hit a new all-time high on Monday and Tuesday but collapsed on Wednesday. SPX recovered somewhat on Thursday and Friday but fell short of the earlier highs.
The NASDAQ Composite also traded higher in this new year and hit a high on Monday that was well below its all-time high from 10/29/25. Similar to the S&P 500 index, NASDAQ tried to recover on Thursday and Friday but fell short.
Trading volume was mixed with SPX peaking today and NASDAQ running slightly above its 50 dma all week. The failed recoveries probably account for VIX declining but remaining around 16%.
Monday will be a trading holiday, Martin Luther King day. The latest measure of GDP growth surprised analysts at 4.3% for the third quarter. The next estimate of Q3 GDP will issue on Thursday. Friday will bring the PCE Price Index, a commonly watched measure of inflation.
NFLX, JNJ, INTC, GE, and IBKR all announce earnings next week.
The Santa Claus rally (the last five trading days in December plus the first two trading days in January), failed this year with a decline of 0.03% on the S&P 500. The first five days of trading in January was positive at +0.6%. A positive first five days of January has an 83% correlation over the past 48 years with a positive market for the year. Now we wait on the January barometer (the entire month's trading results).
Happy New Year!
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The Standard and Poors 500 index (SPX) closed today at 6827, down 74 points for a loss of 1.1%. SPX opened the week at 6875, losing 0.7% for the week. Trading volume has been running below average this week.
VIX, the volatility index for the S&P 500 options, closed today at 15.7% after spiking to 17.9% this morning. VIX opened the week at 16.2% and closed yesterday at 14.9%, setting us up for a surprise this morning.
I monitor the movement of high beta stocks by tracking the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB. SPHB closed at 118.2 today, down almost three points or -2.3%. SPHB opened the week at 118.4, setting up a weekly decline of 0.2%.
The NASDAQ Composite index closed today at 23,195, down 399 points or
-1.7%. NASDAQ opened the week at 23,638, setting up a weekly loss of 1.8%. NASDAQ’s trading volume ran at or below the 50 dma all week. Nasdaq’s trading volume has run below the 50 dma since 11/24.
Today was an ugly day in the market with all of the broad market indices posting losses. Apparently, the market reacted badly to AVGO’s earnings announcement last evening with AVGO losing 46 points or 11% today. Market analysts point to that event as the trigger for today’s sell-off. However, it is worth noting that AVGO’s sales grew 28% and yet earnings grew 37%. Today's market reaction to AVGO seems excessive but may provide hope of recovery next week.
The S&P 500, NASDAQ and the high beta stocks of the S&P 500 (SPHB) all posted losses today, ranging from 1.1% to 2.3%. Many analysts consider SPX to be the broadest measure of the market. Yesterday’s close at 6901 was just below the recent high of 6920 on October 29. The S&P 500 closed down at 6827 after bouncing off support at 6800. The fact that the S&P 500 found support at 6800 is encouraging. Another positive sign was the recovery of the volatility index (VIX) for the S&P 500 today, closing at 15.7% after spiking to 17.9% this morning. The NASDAQ Composite is trading weaker than SPX, closing just above its 50 dma today.
I felt bullish about the market yesterday and thought the bullish run was accelerating. Today’s sell-off surprised me. Two of my trades were set to post their maximum gains yesterday but ended up taking large losses today. Hopefully we can put AVGO’s earnings and the market’s response behind us on Monday.
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The Standard and Poors 500 index (SPX) closed today at 6930, down two points for a loss of 0.03%. SPX opened the week at 6865, gaining 0.9% for the week. Trading volume collapsed this week; everyone on Wall Street took a holiday.
VIX, the volatility index for the S&P 500 options, closed today at 13.6% after opening the week at 15.2%. Lower levels of VIX suggest more complacency on the part of the large institutional traders.
I monitor the movement of high beta stocks by tracking the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB. SPHB closed at 119.6 today, down less than a point or -0.2%. SPHB opened the week at 119.8, setting up a weekly decline of 0.2%.
The NASDAQ Composite index closed today at 23,593, down 20 points or -0.09%. NASDAQ opened the week at 23,450, setting up a weekly gain of 0.6%. Similar to all of the broad market indices this holiday week, NASDAQ’s trading volume was extremely low.
The overall market has bounced back strongly since the lows on 12/17, with the S&P 500, NASDAQ Composite and the high beta stocks of the S&P 500 (SPHB) gaining 3.1%, 4.0% and 3.8%, respectively.
Looking farther back, the market took large drops on 10/10, 11/20 and then 12/17. Each time, those would have been aggressive, but profitable times to buy the market. The large institutional players are nervous, and they sell first to preserve profits and then jump back in the market to avoid missing the next surge upward. FactSet, an eminent market data analysis service, predicts corporate earnings will grow 15% in 2026. Another positive sign was the recovery of the volatility index (VIX) for the S&P 500, declining to 13.6% today.
The latest measure of GDP growth surprised analysts at 4.3% for the third quarter. Corporate capital expenditures, both domestic and foreign, are hitting new highs. The tax bill passed earlier this year will begin to show its effects next year.
All of this adds up to a continuation of the bull market in 2026. Now we watch the three key metrics for next year’s market: the Santa Claus rally (the last five trading days in December plus the first two trading days in January), the first week of trading in January and the January barometer (the entire month's trading results).
This is a wonderful season of the year, starting with Thanksgiving, with gratitude leading to generosity at Christmas, building our hope for a happy and prosperous New Year. Thank you for spending 2025 with me.
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The Standard and Poors 500 index (SPX) closed today at 6603, up 64 points or one percent. SPX opened the week at 6714, losing 1.7% for the week. Trading volume spiked up above the 50-day moving average (dma) yesterday and today.
VIX, the volatility index for the S&P 500 options, closed today at 23.4%. VIX opened the week at 19.6% for a weekly increase of 19%.
I monitor the movement of high beta stocks by tracking the ETF containing the top 100 S&P 500 stocks ranked by beta, SPHB. SPHB closed at 106 today, up 1.9 points or 1.8%. SPHB opened the week at 110, setting up a weekly decline of 3.6%.
All of the broad market indices posted declines of 1.7% up to 3.6%. The S&P 500 index, the NASDAQ Composite, and the high beta stocks of the S&P 500 all posted losses yesterday going back to the lows of mid-September and October. Traders were really spooked by the end of Thursday’s debacle. The week’s decline at that point brought out all the “sky is falling” crowd.
Today’s trading sank even lower, breaking through Thursday’s close, but then the market turned higher and recovered about half of Thursday’s losses before pulling back modestly into the close. This situation reminds me of this time last week. We thought we might be staring over the cliff, but last Friday’s trading gave us some hope. That hope was dashed this week, but here we are again, seeing signs of a moderately strong recovery, leading us to hope this market has found its bottom.
I remain spooked. Cut your losses, if you haven’t already, and sit comfortably on your cash.
