The article explains recent market trends, using a “percentage swing” chart to illustrate them. There were notable market downturns in late 2022 and early 2023, with declines of -7.3% and -7.8%. A larger drop of -18.9% occurred in early 2025, which is referred to as “The Tariff Crash.” Between spring 2024 and spring 2025, there were no significant drops beyond -5%. Market analysis shows a general upward trend starting in summer 2024, with no major reversals until the “Tariff Crash.” By examining the 50 and 200-day moving averages, we can see ongoing market strength and a consistent upward trend. However, there are signals of possible corrections due to current market conditions. Still, momentum analysis indicates confidence in continued upward movement.

Long Term Strategies

The article encourages focusing on long-term strategies, recommending the use of the 200-day and 50-day moving averages for market analysis. It advises ignoring short-term fluctuations and media forecasts. Investors should create a personalized investment strategy based on their timeframe or consider hiring a professional advisor. The key takeaway is to stick to a chosen investment strategy while staying informed about market conditions. Looking back, it is clear that the market has been in a strong uptrend since the notable correction in spring 2025. The -18.9% “Tariff Crash” reset expectations, and since then, the easiest path has been upward. The minor -5% dip in November was just a brief concern, as the primary trend has remained stable. As of December 9, 2025, the S&P 500 is firmly above both its 50-day and 200-day moving averages, which is a strong indicator. The index is around 6250, while the 50-day moving average is about 6050, and the 200-day average is much lower at 5600. This large gap between the current price and the long-term average suggests we might be overextended, raising the chances for a pullback or sideways movement. The November pullback caused the VIX to spike above 25, but it has since calmed down to about 17, which is below the historical average. This drop in implied volatility makes buying options cheaper, while selling them becomes less profitable. In the coming weeks, we should consider strategies that take advantage of the ongoing uptrend while also acknowledging the risk of a short-term drop.

Viable Trading Strategies

Given the strong underlying trend, selling out-of-the-money put credit spreads is a good strategy for the upcoming weeks. For example, with the S&P 500 at 6250, a trader could sell a January put spread with strikes at 6100/6050. This position will be profitable if the index stays above 6100, which is well above the 50-day moving average support level. Due to the large gap between the current price and the 200-day moving average, a period of sideways movement is likely as the market adjusts to recent gains. An iron condor could be an effective way to trade this expected range-bound action. This strategy involves selling a put spread below the market and a call spread above it, creating a defined range for the index to trade within. The key level to watch is the 50-day moving average, currently around 6050. As long as the market stays above this line, the bullish trend remains healthy, and pullbacks can be seen as buying opportunities. A decisive break below this level would serve as the first major warning sign of a trend shift. We should concentrate on these price levels rather than getting swayed by news about a potential “A.I. Bubble.” Market sentiment can change quickly, but trends and key moving averages offer a more reliable guide. The upcoming Federal Reserve interest rate decision may lead to some volatility, so positions should be structured to handle potential short-term spikes. Create your live VT Markets account and start trading now.

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