| 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.”

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| 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.”

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| 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”

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Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Market Rotation Rattles Traders

Traders last week were seemingly rattled by a rotation in stock markets.
Persistent uncertainty over AI prospects and the interest rate outlook buffeted U.S. stocks as the market rallied on Monday and then sold off on Thursday.
For the week, the S&P 500 managed to eke out a paltry gain of .01%, while Nasdaq suffered a loss of .05%.

The darlings of the technology and AI sectors, which have driven much of the market gains and earnings growth this year, look to be showing signs of fatigue.

Sector Performance and Profit-Taking

For the month of November thus far, technology has underperformed, while sectors like health care (+5.9%), energy (+2.6%) and materials (+2.5%) have outperformed. Information Technology (-4.5%), Consumer Discretionary (-3.7%) & Industrials (-2%) were the leading monthly losers.

After a nearly 55% rally in the Nasdaq since the April 8 lows, the technology sector may have been due for a period of consolidation or some profit-taking. This is especially true as we head toward year-end and investors think about rebalancing portfolios and positioning for 2026.

Bitcoin Drops and Volatility Picks Up

The price of Bitcoin, the most widely traded cryptocurrency, extended its recent decline, falling more than 20% below its recently achieved record high. Bitcoin was trading around $95,000 on Friday afternoon, down from the record of about $126,000 reached less than six weeks earlier.

A gauge that tracks investors’ short-term expectations of U.S. stock market volatility had a bumpy ride on Friday. The Cboe Volatility Index climbed as high as 23.0 in morning trading before slipping below 20.0 at midday. The VIX closed at 19.8, up around 4% for the week.

Support Holds — For Now

Friday appeared to be important technically speaking as several indices challenged support at their respective 50-day Simple Moving Averages. It’s not just the S&P 500 (SPX), but also the Nasdaq Composite (COMP), the Nasdaq 100 (NDX), and the PHLX Semiconductor Index (SOX). Fortunately for the bulls, all these indices finished above this indicator after trading below it earlier in Friday’s session, so it appears that technical support, at least temporarily, is holding up. This could set stocks up for a recovery next week.

Also worth pointing out is the bullish seasonality that accompanies November/December and the potential for performance chasing by fund managers, especially since stocks have pulled back recently. Then there’s Nvidia’s earnings report next Wednesday, which has the potential to reignite the “AI bull trade” or add fuel to recent concerns around high valuation and over investment.

Key Technical Levels and Outlook

The potential for stocks to move higher in the first three days of next week leading into Nvidia’s report is above average given the bullish technical set-up. However, the recently elevated VIX level near 23 could be a bearish harbinger, suggesting more downside may be needed, or Nvidia could issue disappointing results/guidance, which would likely result in a down week for stocks.

Technical support levels to closely monitor next week are near SPX 6640, KEY support at 6550, 6345 & 6210–12. Nasdaq support can be seen at 24500, 24200, KEY support near 24000 & 23000.

In any case, we at thetechtrader.com will always “Trade What We See, Not What We Think.”
Harry Boxer, The Technical Trader at www.thetechtrader.com

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Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Tech Stocks Reverse, Markets Pull Back

The big technology stocks that led major U.S. stock indexes higher the previous week reversed course, dragging the market lower amid skepticism about AI prospects. The NASDAQ bore the brunt of the sell-off and ended the week down 3.0%; the S&P 500 and the Dow fell 1.6% and 1.2%, respectively. The Russell 2000 Index finished down around 1.9% for the week; over the two-week period, it fell a cumulative 3.3%.

Recent volatility underscores the risks of historic market concentration, with the top 10 stocks now representing over 40% of the S&P 500’s market cap. Since ChatGPT’s release in late 2022, the Magnificent Seven have soared nearly 190%, lifting the S&P 500 by 75%, but also creating unprecedented market concentration. Bubble concerns are emerging, but today’s tech leaders are profitable and cash-rich while the Fed is loosening its policy.

$NVDA Hits $5 Trillion as AI Sector Rotates

At the center of this rally is NVIDIA, the cornerstone of the AI ecosystem, which recently became the first company in history to surpass a $5 trillion market cap. For context, that’s larger than five of the S&P 500’s 11 sectors and equal to 60% of the entire Russell 2000 small-cap universe.

While enthusiasm around AI continues to fuel trader interest, it also has the potential to amplify volatility, especially when a handful of mega-cap technology stocks dominate index performance.

The skepticism around high-flying stocks, especially after seven consecutive months of gains in the tech-heavy Nasdaq, led to some profit-taking. In essence, AI excitement looks to have collided with valuation reality, prompting a sector rotation.

Bitcoin and Volatility on the Move

The price of Bitcoin, the most widely traded cryptocurrency, fell below the $100,000 level on Tuesday for the first time in more than six months. Bitcoin’s price edged upward later in the week, but its Friday afternoon level of around $103,500 was still down sharply from the record high of around $126,000 reached about four weeks earlier.

A gauge that tracks investors’ expectations of short-term U.S. stock market volatility briefly surged to a three-week high at midday Friday before pulling back and finishing about 10% higher for the week. Despite the rise, the Cboe Volatility Index remained far below levels reached in April, when uncertainty about tariffs sent the index soaring.

Technical Levels to Watch

Technical levels to monitor closely in the days ahead are chart support near SPX 6620–30, 6588, and KEY support near 6550. If that should be taken out, then next is 6449 and 6344. On the upside, resistance appears to be near 6730, 6810, and 6920.

In any case, we will always “Trade What We See, Not What We Think.”

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Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Positive Momentum Continues

The major U.S. large-cap stock indexes climbed for the third week in a row and pushed their record levels higher, although mid- and small-cap indexes fell. A U.S. small-cap stock benchmark fell during a week when its large-cap peers posted gains. The Russell 2000 Index finished down around 1.3% overall, with most of the decline coming on Wednesday afternoon in the wake of the Fed meeting.

The NASDAQ outperformed its peers with a 2.3% weekly total return influenced by strong earnings reports from some of the index’s biggest technology stocks.

The S&P 500 and the Dow both finished more than 2% higher for October as each index extended its positive streak to six months in a row. The NASDAQ outperformed with a 4.7% rise—its seventh consecutive monthly gain. Year to date, Nasdaq is up nearly 23%, the S&P 500 is ahead 16.3%, and the Russell 2000 small-cap index is higher by nearly 14%.

Earnings, AI Momentum, and Market Breadth

Reactions to the week’s Magnificent Seven earnings were mixed, with shares of Microsoft, Apple, and Meta Platforms declining after reporting, while Amazon and Alphabet traded higher. Elsewhere, shares of NVIDIA rose and pushed the chipmaker’s market capitalization over USD 5 trillion midweek, making it the first company to ever cross that threshold.

We saw volatility spike in October, but the market rally ends the month largely unscathed. Moving into November, please remain mindful that further spikes in volatility are possible given uncertainty over the timing of Fed cuts, an ongoing shutdown, and signs of fatigue in what has been a relentless market run.

Meanwhile, the surge in AI-related investment looks like it has further to run, extending this positive catalyst for large technology companies, while it also appears that smaller cap firms should benefit from the combination of tax cuts, lower interest rates, and improving growth.

Chip stocks have been a significant attractor of money flow over the past four months as semis are seen as a prime beneficiary from the ongoing AI infrastructure/datacenter buildout. Several prominent semiconductor stocks, such as Nvidia, Broadcom, and AMD, hit fresh all-time highs this week, but has price moved too far too fast?

The PHLX Semiconductor (SOX) hasn’t been this far above its 200-day Simple Moving Average in over a decade. Additionally, this week’s fresh all-time high in the SOX was met with a negative divergence in the Relative Strength Index (RSI). This type of occurrence is not a timing tool (since the RSI could theoretically continue to move higher with price in the future), but it is a potential bearish indicator, and some near-term caution is warranted from a technical viewpoint.

Breadth Divergences and Key Technical Levels

There was a lot of buzz on Wall Street this week over the S&P 500 registering its worst day of market breadth ever on Monday. The index closed at a fresh all-time high that day yet 80% of its constituent stocks declined. In any event, the divergence in breadth is notable as SPX market breadth slid to a two-month low this week. The “bad breadth” was also seen on both the Nasdaq Composite and Russell 2000 this week.

KEY short-term technical levels are support at SPX 6802–05, 6765–70, and 6660–65. Resistance at 6920–22 and 6985–95.

While I do advise caution and the need for heightened awareness of the current vulnerable condition of the market’s technicals, we at thetechtrader.com will always “Trade What We See, Not What We Think.”

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