The United States Commodity Futures Trading Commission (CFTC) has reported that the S&P 500 NC Net Positions have improved to $-166,000 from $-190,400. This change suggests a shift in market positions and may signal changes in trading strategies. Additionally, the EUR/USD has declined due to low trading volume and careful market sentiment. The GBP/USD has dropped below 1.3500 under similar conditions.

Gold And Cryptocurrency Trends

Gold is still correcting from its record highs, but cryptocurrencies like Bitcoin, Ethereum, and XRP have remained strong. The economic outlook in advanced countries for 2026-2027 indicates a need for stability tests. For traders planning for 2025, there is information on the best Forex brokers, brokers with low spreads, and brokers for specific currency pairs like EUR/USD. It also includes advice on regulated brokers and those catering to regions such as Latam and Mena. The article highlights that the market information shared is not a recommendation to trade. It should be considered for informational purposes only. Thorough research is recommended before making any trading decisions, taking into account the risks involved in market investments.

Change In Trading Positions

Large speculators are becoming less negative about the S&P 500, significantly reducing their net short positions. This suggests that major funds are closing their bets against the market as we approach the new year. Such shifts often lead to market stability or a possible short-term rally. This change follows the market’s recent performance. The Volatility Index (VIX), often called the fear gauge, has fallen below 18 for the first time since October 2025 when it peaked above 25. With the S&P 500 staying strong above the 6,100 level, this decrease in bearish bets indicates that the worst of the fourth-quarter pullback may be over. However, we should proceed with caution as trading volumes are extremely low during the holidays. A strong US dollar is causing weaknesses in currencies like the Euro and Pound, and gold is retreating from its recent record highs. These low-liquidity conditions can lead to significant price fluctuations with little news. Historically, this end-of-year short covering has contributed to what’s known as a “Santa Claus Rally,” a pattern we’ve seen in many past years. The market is now looking ahead, with the November 2025 inflation report indicating a CPI of 2.9%. This has raised speculation that the Federal Reserve may consider cutting rates by mid-2026, which could boost equities if the disinflationary trend continues. Given this situation, it seems smart to reduce outright short exposure. Strategies such as selling out-of-the-money put spreads to collect premium may be beneficial, taking advantage of the lower fear of a major market drop. For those seeking to profit from potential gains, buying call spreads on the SPY or QQQ can provide a defined risk way to participate in a possible rally in the new year. Create your live VT Markets account and start trading now.

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