Macro Measure - December 26, 2025

Market Rebellion Macro Measure & Sector Situation – December 26, 2025

Key Concepts:

• Santa Rally: The tendency for stock prices to rise during the last five trading days of the year and the first two of the new year.
• Megas: Refers to large-cap technology stocks (Amazon, Meta, Microsoft, Nvidia, Tesla) driving market performance.
• Pitchfork Bottom: A technical analysis pattern suggesting potential support and a reversal of a downtrend.
• Inverted Head and Shoulders/Ascending Triangle: Bullish chart patterns indicating potential breakouts.
• OPEX: Options Expiration – a Friday where a large number of options contracts expire, often causing market volatility.
• Disciplined Action (DDA): A trading strategy emphasizing pre-defined rules and risk management.
• Black Swan/Charcoal Swan Events: Unpredictable events with significant impact.
• Standard Deviation: A measure of volatility used in technical analysis.
• Overbought Condition (RSI > 70): A technical indicator suggesting a market may be due for a correction.
• Holidayesque Trading: Characterized by low volume and potentially artificial price movements due to limited participation.

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I. Market Overview & Recent Performance

The video, recorded on December 26, 2025, reviews the market’s performance leading into the end of the year and provides a forward-looking perspective for early 2026. The overall assessment is cautiously optimistic, acknowledging recent gains but highlighting potential risks. The market experienced a mild correction in the fall, leading to the question of whether this sets the stage for a strong start to the new year. The speaker notes the typical “Santa Rally” bullishness and the potential for the “megas” (Amazon, Meta, Microsoft, Nvidia, Tesla) to lead further gains. Despite a large OPEX last Friday, a “pitchfork bottom” appeared promising, suggesting a potential rally. Technically, the market consolidated above a trendline, forming either an inverted head and shoulders or an ascending triangle pattern, both bullish indicators. The market closed positively for the week, but remains vulnerable to a pullback. A higher low was established last week, and the market approached all-time highs, aided by holiday cheerfulness.

II. Bulls to Bulls – Close to the Finish Line?

The current market situation is described as “bulls to bulls close to the finish line,” questioning whether the year-end rally is sustainable. While the week was positive, it’s characterized as “hollow at the core” due to low holiday trading volume. The speaker emphasizes the need to remain vigilant for a potential pullback, despite the positive momentum. The core argument is that while the technicals look promising, the lack of strong volume and the potential for unforeseen events create uncertainty. The megas are identified as key drivers, with all five appearing technically primed for further gains.

III. Technical Analysis – SPY & Sector Breakdown

The analysis focuses heavily on the SPY (S&P 500 ETF) chart. The SPY has broken out above previous resistance levels, achieving a new all-time high and a new closing high. The recent run-up represents a 3.5% gain in approximately a week and a half. However, the speaker cautions against assuming this breakout will sustain, citing the historical tendency for pullbacks after new highs in 2025. The RSI (Relative Strength Index) on the daily chart is at 60-61, indicating the market is not yet overbought. The speaker suggests a bullish stance but acknowledges the possibility of a pullback to test support levels.

Specific Chart Observations:

• SPY: Breakout attempt after two months of corrective action. Holding above the former high is crucial.
• Diamonds (IWM): Consolidating after a recent run, clinging to the rising 20 SMA.
• Q's (QQQ): Slightly lagging, but capable of a rapid catch-up.
• XLB (Materials): Strong performance for two consecutive weeks, suggesting potential in the materials/commodities sector.
• Industrials: Approaching all-time highs.
• Discretionary & Transport: Holding steady.
• Defensive Sectors: Underperforming.
• Financials: Making new highs.
• Energy: Backed off, potentially beneficial for consumers.
• XLK & XLC (Technology): Showing signs of renewed leadership.

IV. Mega-Cap Stock Analysis

A detailed look at the “megas” reveals generally positive technical setups:

• Apple (AAPL): Broke above resistance, with potential to reach 280-283.
• Amazon (AMZN): Above all SMAs, showing strong momentum.
• Google (GOOGL): Needs to break above recent highs to confirm bullish momentum.
• Meta (META): Showing signs of shifting back to a bullish trend, potentially breaking out above the 200 SMA.
• Microsoft (MSFT): Approaching a breakout, with potential to reach 500.
• Nvidia (NVDA): Experienced a pullback after making a new high, but remains technically strong.
• Tesla (TSLA): Pullback after a new high, but supported by rising SMAs.

V. Risks & Considerations

Several risks are identified:

• Presidential Cycle: The second year of the presidential cycle historically tends to be weaker.
• Potential Pullbacks: The market has shown a pattern of pullbacks after new highs in 2025.
• CDS Issue: Concerns surrounding Credit Default Swaps and potential systemic risk.
• Silver Situation: Potential for physical shortages and market disruption.
• Unknown Black Swan Events: Unforeseeable events that could significantly impact the market.
• Holiday Trading Volume: Low volume and potentially artificial price movements.
• SLV (Silver ETF): Potential for volatility due to supply concerns.

VI. Trading Strategy & Conclusion

The speaker advocates for a “news neutral” assumption, emphasizing discipline and risk management. He suggests being prepared to trade both long and short, with a bias towards bullishness given the current technical setup. He recommends setting aggressive entry and exit points, managing risk tightly, and remaining adaptable to changing market conditions. The overall conclusion is that while the market looks promising, caution is warranted. The speaker acknowledges the difficulty in making a definitive call, given the conflicting signals and potential risks. He wishes viewers a happy and safe holiday season and encourages continued vigilance in the new year.

Notable Quote:

“You’re not always at a juncture where you should be making a new fresh call. That’s something, you know, I think that is probably not said enough.” – Wayne, regarding the importance of avoiding forced market calls.