Last week, I didn’t get all the statistics into the newsletter regarding the post-Thanksgiving trading, plus other related T-day trades. So, here’s a quick summary updated with current data.
First, we’ll repeat the one table that was in last week’s newsletter: Buy Russell 2000 ($RUT; IWM) on the close of day before Thanksgiving and holding through the second trading day of the new year:
Recently, I have been seeing some references to the “wheel” strategy. Of course, they come with all kinds of accolades about how you can’t lose, etc. I thought it might be a good time to discuss that strategy.
If we ask AI or Google “what is the wheel strategy?” we get back an answer similar to this:
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.
If you’re looking to strengthen your trading discipline, I’ve just posted a new Substack article and video on what I consider the most important part of trading: risk management. In it, I walk through position sizing models, trade adjustments, using the Greeks to monitor risk, and how to protect a portfolio as markets evolve.
The stock market sold off fairy heavily into the 6500-6550 support zone for $SPX on November 14, but then it rallied strongly off of that support area. That support has been tested several times and continues to get an A+ on the test. But overhead, there is a myriad of resistance, so for now $SPX remains in a trading range.
We have several seasonal trades around Thanksgiving, and we’ll get into those more in next week’s newsletter, but for now we want to prepare to enter the first part, which is the “Post-Thanksgiving Seasonal.” That trade is based on the fact that the market normally rallies right after Thanksgiving. Furthermore, the rally is typically in the small-caps, which have already started to accelerate and outperform this week...
We have been trading this seasonal spread annually every year since 1994, except for 1995. Last year, we were stopped out with a rather large loss after 53 trading days. The spread was sitting very near our stop one day, and then jumped over six points higher the next day, costing an additional $2,520 per contract.
If you missed my presentation at the MetaStock Stock & Option Traders Conference on November 11, 2025, the full replay is now available.
In this session, I break down the current state of the market through the lens of his most trusted option-based indicators — including volatility bands, put-call ratios, breadth oscillators, and more. It’s a timely, practical look at what’s driving price action right now, and what these indicators are suggesting as we head into year-end.
For over a week now, strong selloffs have been followed fairly quickly by strong rallies. This is the type of action that occurs in a trading range environment, and we might well be in one of those for a while now.
There is resistance at 6900 (the all-time highs). Furthermore, support emerged at 6630 (last Friday's lows) to go along with the stronger support level in the 6500-6550 area. Today's low (so far) was 6646, which would reinforce that general area 6630-6646 as support.
Recently, there have been some articles in the media – both print and social – about box spreads and how people are using them to get reduced-cost loans. Some of these articles lacked full information and others seem to miss the point completely, so we thought we’d explain how this whole thing works.
