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The Standard and Poors 500 index (SPX) closed today at 6740, down 90 points for a loss of 1.3%. SPX opened the week at 6824, setting up a weekly loss of 1.2%. SPX broke down through the 50 dma last week and today’s slide takes SPX to its low for this year. Trading volume ran along the 50 dma this week.
VIX, the volatility index for the S&P 500 options, spiked to 28% during trading on Tuesday and spiked as high as 30% today before closing at 29.5%.
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 today at 118.3, down 3.6 points or 3%. SPHB opened the week at 120.3, setting up a weekly loss of 1.7%. Trading volume was above average most of the week, peaking yesterday.
The NASDAQ Composite index closed today at 22,388, down 361 points or
1.6%. NASDAQ opened the week at 22,322, setting up a weekly loss of 0.3%. NASDAQ was hit hard early in the week, recovered by Thursday and then gapped open lower today. NASDAQ’s trading volume ran along the 50 dma all week.
The war in Iran has spooked world economies. Yesterday, a retired admiral wrote an article saying that the Strait of Hormuz would be closed by Iranian speed boats. He set off a panic about oil prices that continued into today’s markets. Allow me to apply a little common sense and observe that most of the American Navy is in the Persian Gulf north of the strait of Hormuz and in the Gulf of Oman south of the strait and they have sunk 90% of the Iranian navy. This will be all over shortly.
Successful trading in this market is limited to two areas: 1) Buying quality stocks at bargain prices and 2) day trading the indices. I have been trading the SPX zero dte options all week and booked gains every day for a total of $4,900 with ten contracts in a $50k account.
If you have any questions or concerns, please contact me. I will be happy to help in any way I can.
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The Standard and Poors 500 index (SPX) closed today at 6836, up three points for effectively no gain (0.05%). SPX opened the week at 6917, setting up a weekly loss of 1.2%. SPX broke down through the 50 dma yesterday and tried to recover today but could not make it back to the 50 dma. Trading volume ran slightly above average for the week.
VIX, the volatility index for the S&P 500 options, opened the week at 18.0% and closed today at 20.6%. The intraday high this week occurred this morning at 22.4%. A VIX reading at 20-22% isn’t consistent with the recovery we might be tempted to read into today’s trading action.
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 today at 122.6 for a one percent gain. SPHB opened the week at 122.6, setting up a weekly gain of zero, a flat trading week. Trading volume was above average only on Thursday. SPHB broke its 50 dma early this morning but recovered quickly.
The NASDAQ Composite index closed today at 22,547, down 50 points or -0.2%. NASDAQ opened the week at 22,952, setting up a weekly loss of 1.8%. NASDAQ is a long way from recovering its 50 dma at 23,358. NASDAQ’s trading volume fell below the 50 dma today.
The question for the week: Did the S&P 500 index signal a bottom today?
Key facts:
1) Today’s low around 6800 coincides with lows set on February 5 and January 20.
2) SPX lost 136 points yesterday but only gained 80 points at its high today.
3) SPX weakened this afternoon and closed nearly at Thursday’s close.
4) Today’s low in SPX around 6800 is close to the lows set on 1/20 and 2/5.
My conclusion: We would like to read a “finding support and recovering” from this chart. The observations above don’t support that conclusion. Today’s market action could be the first step of recovery, but I wouldn’t risk my money on that premise.
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 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 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.
