Free Weekly Stock Market Commentary 12/5/2025

By Lawrence G. McMillan

The market has stalled near the top of the 6500-6900 trading range. This comes after a strong rally the week of Thanksgiving. But unless there is a clear breakout to new all-time highs, the trading range scenario is still dominant. Part of the problem may be the upcoming FOMC meeting, where we will learn on December 10th whether or not the Fed is going to lower rates again. It seems that the market is expecting that the rate cut will occur. If it doesn't, that could be problematic.

Equity-only put-call ratios are still rising, which means that they are still on sell signals for the stock market. Traders have been buying puts in relatively large quantities since that mid-October scare -- even during the stock market rally since then.

Breadth continues to be a volatile technical indicator. Breadth has improved sharply since that November 20th market low, and the "stocks only" breadth oscillator remains on a buy signal. However, the NYSE-based breadth oscillator is weaker and has been flirting with a sell signal.

Implied volatility has fallen. The $VIX "spike peak" buy signal of November 21st remains in place, and it will continue to do so for 22 trading days, unless $VIX rises back above its most recent peak at 28.27. Meanwhile, with $VIX below its 200-day Moving Average, there is a possibility of a new trend of $VIX buy signal in the coming days.

Another thing that the bulls have working for them right now is seasonality. There are a number of bullish seasonal factors that occur between Thanksgiving and the end of the following January.

In summary, there aren't many sell signals or negative indicators. while buy signals abound. The two main impediments currently seem to be the resistance on the $SPX chart at 6850-6900 and the worries about the upcoming FOMC meeting on December 10th. Regardless, we will continue to take positions in line with the confirmed signals and will continue to roll deeply in-the-money options.