Weekly Update for Deceber 22-26, 2025

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Weekly Market Update Summary for Dec 15–19, 2025:
Overall Market Performance:
The S&P 500 ended the week slightly up +0.1%, turning a potential down week positive by the narrowest margin (was down -0.77% entering Friday).
Described as a roller-coaster week driven by volatile swings in mega-cap tech and AI-related stocks — down days when AI was out of favor, strong rebounds when it regained favor (especially Thursday/Friday).
Major indexes mixed:
NASDAQ: +0.5%
Dow: –0.7%
Small caps (Russell 2000): –0.9%
Volume was above average most days, with a massive spike on Friday due to quarterly/monthly options expiration ("OPEX").
Key Themes & Drivers:
AI / Mega-Cap Volatility: Dominant factor. Early-week weakness in names like Oracle and Broadcom (despite solid earnings) → late-week reversal sparked by strong Micron report, lifting chips and tech.
Sector Rotation: Money rotating out of pure mega-cap growth into cyclical/discretionary areas (e.g., travel, leisure, Tesla, Amazon performing well). Discretionary-to-staples ratio holding up better than growth-to-value.
Pockets of Strength: Healthcare (boosted by drug-price agreement news), discretionary, some cyclicals.
Weakness: Energy (oil pressured by potential Russia-Ukraine peace deal), defensives (staples, utilities), real estate.
Economic Data: Mixed but generally supportive. CPI showed modest YoY slowdown (taken positively), retail sales flat, payrolls beat but with downward revisions. Inflation gauges remain contained; no major shift in Fed expectations.
Rates & Bonds: 10-year yield at 4.15% (not currently problematic). Earlier concern about rising 30-year faded.
Technical Outlook:
Short-term (Daily): Leaning negative overall. Lost then recaptured key moving averages (50-day on S&P/NASDAQ, 20-period on S&P). Internal breadth and momentum rolling over.
Weekly/Intermediate: Barely positive — trend indicators hanging by a thread (green line just above red). No strong trend in either direction; ADX declining (weakening trend).
Market remains less than 1% from all-time highs but lacks conviction. Support 6,400, resistance 7,000 on longer-term pivots.
Breadth healthy longer-term (new highs strong, few new lows), but some shorter-term deterioration.
Sentiment & Seasonality:
Sentiment mixed: Fear & Greed neutral (45), longer-term euphoria cooling slightly, but some gauges (active managers) showing high bullishness.
VIX stable and low — no spike in fear despite volatility.
Strong positive seasonality ahead: Late December historically one of the best periods (up 1.2–1.5% on average, positive 70%+ of the time since 1950s/1960s). Expectation for year-end rally unless there is a major drop.
Outlook for the Coming Week (Dec 22–26):
Thin holiday trading expected (Christmas week).
Potential carryover volatility from options expiration.
Seasonal tailwind strong; market likely to push higher into year-end barring surprises.
2025 on track for another positive year; focus shifting toward 2026 earnings expectations (still solid 15% growth forecast).
Risks: Continued AI/mega-cap swings, any geopolitical developments (Russia-Ukraine), delayed inflation data.
Conclusion:
Choppy, news-driven week with narrow positive close. Market internally mixed and trendless short-term, but seasonal strength and contained macro risks point to likely upside bias into year-end.

PDF of Slides:
https://drive.google.com/file/d/1Q5dpwPUA8V0IybFPMCdKquo324wBajQ-/view?usp=sharing

DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!