The S&P 500 has made a good recovery, gaining 143 points in just two days. Now, there are questions about whether the market correction is over, especially with the VIX dropping and the dollar strengthening. In the UK, unemployment rose to 5% over the last three months, with 22,000 jobs lost. This could lead to potential rate cuts by the Bank of England. Currently, GBP/USD is trading in a tight range between 1.3170 and 1.3180.

Gold And Cryptocurrency Trends

Gold is holding strong above $4,100 per troy ounce due to a weaker dollar. Bitcoin is now over $105,000, while altcoins such as Ethereum and Ripple are slowing down. The weak UK job market suggests more difficulties ahead, with unemployment reaching a pandemic high. Bitcoin Cash has seen a 1% rise, helped by capital inflows in futures markets. Looking to 2025, we’ve outlined the best brokers and account types in different regions. Various guides provide helpful information for traders on costs, leverage, regulations, and preferred platforms. Traders must do careful research before investing due to market risks and possible losses. No personal stock positions are discussed, keeping the focus on market conditions. Last week, buyers came back strong, just as we expected after the market dropped in October. The S&P 500 bounced back, but we need to see if this recovery will last. The next few weeks will be crucial in deciding if this is a lasting trend or just a short-term relief. A clear sign of positivity is the drop in market fear, shown by the Volatility Index (VIX). The VIX has fallen from near 24 in October 2025 to around 17 this week, indicating that traders are feeling less worried about significant downturns. This environment is generally good for strategies like selling out-of-the-money puts or buying call options on major indices.

Bonds And The Dollar

However, we need to keep an eye on the bond market, as Treasury yields are not supporting this stock rally. The 10-year yield remains high at about 4.5%, which can drag down stock market values by making bonds more appealing. Until we see a significant drop in yields, the upside for stocks may be limited. Meanwhile, the U.S. dollar is moving in a way that doesn’t match the positive signals from the stock market. The Dollar Index (DXY) is rising towards 108, which can hurt profits for U.S. multinational companies. This strength indicates caution in the market and complicates bullish bets. Given these mixed signals, traders should think about strategies that limit risk. Buying call spreads on the SPX can allow for potential gains while reducing losses if the rally weakens due to high yields and a strong dollar. Taking outright long positions might be too early until other market signals align. This situation feels familiar, as it resembles past times when markets tried to rally despite strict central bank policies. While the recent October jobs report showed only 170,000 jobs added, reducing some pressure on the Fed, their comments remain cautious. The market’s direction in December will depend on whether investor optimism can overcome these evident economic challenges. Create your live VT Markets account and start trading now.

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