| By Harry Boxer, Technical Market Analyst

Stocks Stall After Record Highs

The S&P 500 and the Dow slipped from the record highs that both indexes had reached the previous week. They regained some ground on Friday’s opening trading day of 2026 but, the results for the first holiday shortened transition week into 2026 saw the S&P 500 lose 1%, while Nasdaq was very near unchanged.

Last week the S&P 500 index (SPX) notched a fresh all-time closing high, surpassing its prior all-time high of 6,920 from back on October 29th, but failed to garner any follow-through momentum to the upside last week.

The SPX is just over 0.5% above its 50-day Simple Moving Average (SMA) of 6,804. Although the new all-time high is bullish, and the longer-term trend remains in a bullish uptrend, on a near-term basis the lack of follow-through conviction may suggest additional sideways consolidation may be needed before trend can be established.

2025 Performance and Market Leadership

The S&P 500’s 17.9% total return for 2025 marked the third year in a row that the index generated a double-digit gain. However, the latest result fell short of 2024’s 25.0% return and 2023’s 26.3% figure, which were the strongest back-to-back annual results since 1997/1998.

The technology-oriented mega-cap stocks known as the Magnificent Seven extended their dominance of the U.S. market. Those seven names contributed 42% of the S&P 500’s total return in 2025 and 55% over the latest three-year period, according to S&P Dow Jones Indices. Moreover, the Magnificent Seven’s share of the index’s overall market capitalization rose to 34.9% at the end of 2025 from 33.5% at the close of 2024.

For the third year in a row, communication services and information technology were the top-performing sectors in the S&P 500, as they generated total returns of 33.6% and 24.0% in 2025, according to S&P Dow Jones Indices. All 11 sectors delivered positive performance; while real estate was the weakest sector, it nevertheless generated a 3.2% return.

January Seasonality and Early-Year Crosscurrents

Historically, January’s stock market performance has been a strong indicator of what may be in store for the rest of the year. In fact, about 72% of the time since 1929, the S&P 500 has posted a positive return for the year after gaining ground in January or has gone on to post an annual loss when the market has declined in the first month, according to S&P Dow Jones Indices. That’s also been the case each of the past four years.

The first week of trading for the year can be a bit tricky to assess as conflicting forces can be at play—the January Effect (fresh capital being put to work), capital gain selling by investors waiting on the New Year to postpone taxes and potential rotation into underperforming sectors.

Commodities and Crypto Diverge

Following a steep drop on Friday the prior week, oil prices spent the early part of the week recovering some of those losses. On Wednesday, however, most of those gains were reversed on new expectations for oversupply in the coming months. Altogether, last year was a bearish year for oil prices, influenced by escalating geopolitical tensions. Those same tensions pushed prices lower again to start 2026.

Gold started the week by making a new all-time high just above $4,550, but the bullish price action would be short-lived. The metal closed Monday down over 4.4%. Elsewhere, silver has been the focus for many traders, as prices jumped to a new all-time high above $83 on Monday. It then pulled back over 10%, but recovered a chunk of those losses on Tuesday before falling again on Wednesday. Altogether, gold closed the year up over 64.5%. On Friday, it opened 2026 by rising briefly before reversing much of those gains.

Bitcoin continued to vacillate around its local range to start the week. Following a steep drop of over 17.5% in November, its price spent all of December consolidating. Altogether, it’s coming off a disappointing year for investors, closing 2025 down 6.3% despite making a new all-time high back in October. The same can be said for Ethereum. It fell 10.8% on the year. Traders largely characterize crypto’s recent price action as unsubstantial, and are waiting for greater volatility in either direction for further clues on where the market might head next. On Friday, there were some potential signs of life in the market, with bitcoin making a modest push higher.

Key Technical Levels to Watch

Important technical levels to watch in the days and weeks ahead are S&P 500 support near SPX 6800-05, 6720-22, 6630 & a key level at 6520-22. Resistance appears near 6945, 6990-7000 & 7050-75 zone.

For the Nasdaq 100 or NDX, support noted at 24900-20, 24645-50, 24360 & 23850-55. NDX resistance can be seen at 25715, 25825-35 & 26130-35.

In any case, as we always do at thetechtrader.com, we’ll “Trade What We See, Not What We Think.”

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| By Harry Boxer, Technical Market Analyst

Equity Markets, Volatility, and Global Performance

2025 was a financially rewarding year for traders, with global equity markets delivering strong returns. The S&P 500 recorded 39 new all-time highs, while stock markets in Germany, the U.K., and Japan also surged to record levels. Bonds, though trailing equities, posted positive returns, with U.S. investment-grade bonds achieving their strongest annual gain since 2020. Credit-sensitive fixed-income investments fared even better, with emerging-market debt and U.S. high-yield bonds gaining over 8%.

After two years of relative calm in markets, volatility returned in 2025 as investors faced trade-policy upheaval and a record-breaking government shutdown. The S&P 500 logged 13 daily moves of more than 2% (six higher, seven lower), exceeding the combined total of the prior two years. Twelve of these occurred in the first half of the year following the Trump administration’s April tariff announcements. Stocks fell sharply on recession fears, with the S&P 500 dropping 19% from its peak.

However, subsequent negotiations lowered tariffs to levels still elevated by historical standards but meaningfully below the April peak. De-escalating trade tensions, steady economic activity, and ongoing AI enthusiasm helped pave the way for strong earnings growth and market gains, with the S&P 500 posting its third consecutive year of returns over 15%.

Sector Leadership and Index Performance

The three distinct groups that led the market this year were Communications Services +34.1%, Information Technology +25.7%, and Industrials +21.3%. Year to date the major indices surged nearly 18% for the S&P 500 and 22.2% for Nasdaq, and the Russell 2000 small cap index is at +13.64% for the year.

The benefits of global diversification were evident in 2025, with international stocks outperforming U.S. equities by 13%, the largest margin since 2009. Fiscal stimulus in Germany and monetary easing by the European Central Bank supported eurozone economic activity and markets. In Japan, equities posted strong gains despite higher U.S. tariff rates, with corporate profit margins surging to an all-time high.

On the week, the S&P 500 surpassed a record high on Tuesday and the Dow followed suit on Wednesday, pushing above their previous peaks set less than two weeks earlier. In a holiday-shortened trading week the S&P 500 led advances with a 1.4% gain, followed by Nasdaq +1.2%. The small-cap Russell 2000 Index was the worst performer of the major indexes, finishing the week 0.19% higher.

Precious Metals, Crypto, and Oil

Precious metals prices pushed their record levels higher, with silver surpassing $77 per ounce for the first time and gold and platinum also setting record highs. Silver is up around 155% year to date based on Friday afternoon’s price and gold was up about 70%.

A rough end to a big year for bitcoin: Bitcoin investors had a lot to be thankful for this year. Growing legitimacy among institutional investors, a pro-crypto U.S. administration and major legislation, and all-time highs. But the last quarter hasn’t gone so well. A major crypto liquidation event in October rattled investors, and bitcoin futures prices are down around 24% since then, putting it about 7% lower on the year.

Meanwhile, gold and silver have soared since that crypto liquidation in October, with their futures prices rising about 13% and 51%, respectively. The metals’ moves call into question a core element of bitcoin’s investment thesis: that it’s a store of value, the new “digital gold.” With bitcoin’s price currently limping along in a narrow range, investors may find out relatively soon whether the early days and weeks of 2026 will bring more pain or a revival of bullish sentiment.

The price of oil rebounded modestly in the latest week, although it remained on pace for the steepest full-year decline since 2020. U.S. crude was trading around $57 per barrel on Friday afternoon, well below its year-end 2024 level of about $72.

Volatility and Technical Outlook Heading Into 2026

An index that tracks investors’ expectations of short-term U.S. stock market volatility fell on Wednesday to the lowest level in more than 12 months. The Cboe Volatility Index closed at 13.6, down from a recent high of 26.4 on November 20. The year-to-date high came in early April, when the VIX surged above 50 amid uncertainty over tariffs.

Technically the markets are quite extended and vulnerable to retracements/pullbacks. Be very alert in the first part of 2026 to the possibility of a substantial decline. Pay close attention to short and intermediate-term support levels. They can be found near SPX 6850 and 6790, but 6720-22 represents a level that if broken might send the indices substantially lower. Resistance lies near 6945-50, 6990, 7000 and 7040-50.

Final Thought

In any case, as we always do at thetechtrader.com, we’ll “Trade What We See, Not What We Think.”

*No credit card required

| By Harry Boxer, Technical Market Analyst

Indexes Drift Near Record Highs

The major U.S. stock indexes slipped over the first half of the week but rebounded on Thursday and Friday. For the week, the NASDAQ and S&P 500 finished fractionally higher while the Dow ended slightly down. The latter two indices remained about 1% below their record levels set on December 11. The S&P 500 ended the week with a gain of just .01%, Nasdaq was +.05% The Russell 2000 Index performed worst, declining 0.86%, followed by the Dow Jones Industrial Average, which shed 0.67%.

Nearing the end of the year the results are as follows: Nasdaq +20.7%, S&P 500 +15.2% and the Russell 2000 small cap index +13.4%.

Precious Metals Continue Historic Run

Precious metals prices continued to rise, with silver surpassing $67 per ounce for the first time ever and gold eclipsing a record set two months earlier. With less than two weeks left in 2025, silver was up more than 130% year to date based on Friday’s prices, and gold was up 64%.

Holiday Trading, Mixed Signals Ahead

Next week will be holiday-shortened and there doesn’t appear to be many market-moving catalysts next week. Trading volume is expected to be light, which could suggest the potential for higher volatility. It’s a difficult environment to forecast which direction markets are likely to move, not only because there were a lot of mixed economic signals this week, but there’s also a mixed technical picture.

The late week recovery in the SPX is encouraging, but the price action in the Russell 2000 looks murky at this point. Yes, the intermediate and longer-term technical trend in all the majors is bullish, but very near-term there isn’t a decisive trend.

Closing Perspective

In any case, as we always do at thetechtrader.com, we’ll be “Trading What We See Technically, Not What We Think”

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| By Harry Boxer, Technical Market Analyst

Stocks Start December With Modest Gains

Stock markets began the month of December on a positive note, with the S&P 500 moving modestly higher for the week, just .03%. Overall, year-to-date, the S&P 500 is up about 17%, while the technology-heavy Nasdaq advanced .09% for the week and is up a solid 22% year to date.

The S&P 500 is now within a percentage point of record highs set in late October and mid-November, respectively. The NASDAQ finished less than 2% below its historic peak.

Historically, December has been a good month for investors. Traditionally, the last five trading days of the year plus the first two trading days of January are known as the “Santa Claus rally” period. Since 1980, this period has been positive 73% of the time, with an average S&P 500 gain of 1.1%.

Markets Rally Into Year-End as Fed Decision Looms

More broadly, the stock market has had a nice run since the April lows, with the S&P 500 up about 38%, with just one 5% pullback in November. As we approach year-end, traders are likely considering how to position for the year ahead.

Perhaps the biggest catalyst between now and year-end is the Federal Reserve meeting, which will be held on December 9–10. Keep in mind that investors will not only get an interest rate decision at the end of this meeting, but also an updated set of economic projections and the Fed’s “dot plot,” which represents the best estimate of where the committee sees interest rates heading over the next three years or so.

Bond market trading continued to support expectations of an interest rate cut at the U.S. Federal Reserve meeting scheduled to end on Wednesday, December 10. At Friday’s market close, prices in rate futures markets implied an 87% probability that the Fed would cut by a quarter point according to CME FedWatch. Historically, when the Fed is cutting rates and the economy is holding up, stock markets perform better.

Sector Strength and Key Index Levels

Despite a recent run of volatility for mega-cap technology stocks, tech-oriented sectors continued to lead the broader market entering the final weeks of 2025. As of Friday’s close, communication services was the top performer across all 11 sectors with a 36% gain, while information technology was second with a 26% return.

INDEX SUPPORT/RESISTANCE for Next Week

SPX support 6830, 6800–05, 6770, 6660 & 6522
SPX resistance 6895, 6920–22

NDX support 25440, 25150, 24550 & 23870–75
NDX resistance 25765 & 25830

In any case, as we always do, we’ll “Trade What We See, Not What We Think.”

*No credit card required

| By Harry Boxer, Technical Market Analyst

U.S. Indexes Rise on Rate-Cut Optimism

U.S. stock indexes finished the holiday-shortened week higher, boosted by dovish comments from some Federal Reserve officials and several weaker-than-expected economic reports that seemed to reinforce the idea that a December rate cut remains on track.

Small-cap stocks outperformed their large-cap peers, as the Russell 2000 Index advanced 5.52% for the week and is ahead 7.5% for the year. The technology-heavy Nasdaq Composite also posted strong returns, rebounding from the prior week’s sell-off as concerns regarding elevated valuations and spending on artificial intelligence (AI) appeared to take a back seat to optimism around the growth potential from the technology. It is now +16.5% YTD.

The S&P 500 is now on track for a third consecutive year of double-digit returns, up about 13.5%. And that is despite a near bear-market correction in April, and the recent 5% pullback/retracement. Traders who stayed the course through volatility were rewarded.

International equities have fared even better, with the MSCI All Country World Index (ex-U.S.) up 23%, driven by a weaker U.S. dollar and an improving global growth outlook.

Seasonal Trends Support Further Gains Into Year-End

After a brief wobble in early November, equity markets regained momentum, with the S&P 500 finishing the month with a slight gain. Seasonal trends appear to point to a strong year-end finish: historically, the post-Thanksgiving period has delivered solid returns. Over the past 30 years, December has averaged a gain of about 1%, with markets rising roughly 70% of the time.

Crypto & Volatility: Bitcoin Still Weak, VIX Rises Again

A week after falling into bear market territory, the price of Bitcoin, the most widely traded cryptocurrency, fell further, sinking to the lowest level in seven months. Bitcoin was trading around $85,000 on Friday afternoon, down from its record price of about $126,000 reached in early October. The pullback low was near $80,000 before a late-week rebound.

Volatility increased. A gauge that tracks investors’ short-term expectations of U.S. stock market volatility surged, accelerating a rise that began the previous week. The Cboe Volatility Index climbed as high as 28 in trading on Thursday before pulling back to close around 23 on Friday. The figure was up from the prior week’s closing VIX level of just below 20.

Key Technical Levels to Watch

Short-term technical levels to watch going forward are chart resistance at SPX 6870 and 6920. Support appears near 6770 and 6725. Support beneath those levels is near 6630 and MAJOR support at 6522.

In any case, as we always do at thetechtrader.com, we’ll “Trade What We See, Not What We Think.”

*No credit card required

| By Harry Boxer, Technical Market Analyst

Volatility Surges as Markets Face Deepest Pullback Since April

Global markets were hit by another bout of volatility last week, with stocks finishing lower in a choppy week, continuing the deepest pullback/retracement since the tariff driven sell-offs in April. Spikes in volatility are normal in equity markets, and we think even less surprising given the speed and scale of recent gains.

The NASDAQ sustained its third consecutive weekly decline as doubts resurfaced about the resilience of this year’s AI-fueled market rally. The index finished the week down 2.7%; with more modest weightings in tech stocks, the S&P 500 and the Dow posted smaller declines of just under 2.0%.

The weakness in part reflects concerns over the technology sector, with a solid earnings report from NVIDIA unable to stifle the correction emerging across these companies as investors appear to take profits amid ongoing bubble chatter.

AI-Fueled Rally Shows Cracks as Mega-Caps Reverse

The boom in AI related stocks, which had helped power large-cap equity-market gains, is looking vulnerable, with investors booking profits as concerns grow over valuations and a potential bubble. There is increasing uncertainty that the Fed will swoop in with rate cuts to help soothe markets.

The Magnificent Seven mega-cap tech companies have had a tough month. In market-capitalization-weighted terms, this group is down close to 6% in November so far, pushing large-cap markets, and in particular the tech-focused Nasdaq index, lower.

After an initial strong post-earnings rally in NVIDIA stock helped drive a 1% bounce in the S&P, we saw a swift and sharp reversal in sentiment that pushed markets lower. Since 1957 we have only seen eight instances in which an opening rally of this magnitude has closed in the red.

Volatility Rises, Bitcoin Slides, and Gold Holds Over $4,000

A gauge that tracks investors’ short-term expectations of U.S. stock market volatility surged, accelerating a rise that began the previous week. The Cboe Volatility Index climbed as high as 28 in trading on Thursday before pulling back to close around 23 on Friday. The figure was up from the prior week’s closing VIX level of just below 20.

In addition, the price of Bitcoin, the most widely traded cryptocurrency, fell further, sinking near $80,000 to the lowest level in seven months. Bitcoin was trading around $80,000 on Friday afternoon, down from its record price of about $126,000 reached in early October.

Gold has stabilized over $4000 but still looks potentially vulnerable technically.

Key Technical Support & Resistance Levels to Watch

Key technical support levels in the days ahead appear to be near SPX 6522-25 & 6465. Technical chart resistance appears near 6675 and 6860-70.

In any case, as we always do at thetechtrader.com, we’ll “Trade What We See. Not What We Think”

*No credit card required