On Friday, the S&P 500 and Nasdaq were relatively stable, following recent rallies before Christmas. The S&P 500 was above its mid-December peak, while the Nasdaq needed further improvement. NVDA had a strong performance due to news about chip tariffs, benefiting other companies like MU and AVGO as well. After a dip to $475, TSLA’s chart appears promising, similar to GOOGL’s recent movements. Focus is turning towards seasonal trends and early January patterns, with volatility indicators remaining steady.

Market Position End of Year

Gold and silver saw gains, while oil prices were impacted by hopes for peace in Eastern Europe and worries about Venezuela. Bitcoin’s future remains unclear, especially concerning the Nasdaq’s potential impact. As we approach December 29, 2025, the market has already shared much of its holiday momentum. The classic Santa Claus Rally, which historically leads to a positive S&P 500 return about 77% of the time in the last week of the year, seems to have already occurred in the days before Christmas. Currently, we can expect a narrow trading range as the S&P 500 solidifies its position above the mid-December peak. The recent halt on new chip tariffs has greatly benefited the tech sector, particularly semiconductors. This has positively impacted companies with strong earnings, like Micron (MU), and helped Broadcom (AVGO) bounce back. The PHLX Semiconductor Index (SOX) has outperformed the S&P 500 by nearly 5% this month, a trend we anticipate will continue into early 2026. Dips in strong growth stocks are quickly being bought up, signaling optimism for derivative traders. Tesla’s recent drop to $475 created a clear buying opportunity that led to a surge in call options, similar to the interest in Google earlier this quarter. This suggests that traders should be prepared to use options to take advantage of short-term weaknesses in leading stocks.

January Effect

As we look ahead to the first two weeks of January, we expect the “January Effect” to unfold, possibly benefiting stocks that lagged last year. With the VIX currently low around 13, it indicates a calm market that may favor bullish strategies. This situation could be perfect for selling puts or setting up call spreads on indices with growth potential, like the Nasdaq 100. In commodities, gold and silver continue to rise as the Federal Reserve has indicated it will pause rate hikes into the new year. Oil prices are trapped in a range as traders consider peace prospects in Eastern Europe against the risk of rising conflict in Venezuela affecting supply. This situation leaves oil options trading with high implied volatility, presenting chances for premium sellers. Bitcoin’s connection to the Nasdaq has become less consistent, leading to unique trading opportunities. While the tech index has been stable, Bitcoin has surged past $115,000, showing independent strength not seen since early 2024. Traders might explore this divergence as a pairs trading opportunity, using derivatives to speculate whether the gap between them will widen or close. Create your live VT Markets account and start trading now.

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