With the year winding down, fund managers are not taking much risk, nor are they in sell mode. Adding new positions isn’t something many do, and most of us, if not all, are exhausted from a busy year. The sell side didn’t have any key upgrades/downgrades today. Just get me to 2026 already is something I have heard a few times recently. That is the key market dynamic – lack of sellers and people just wanting to get to the new year and take a little time off. Will it be Santa or the Grinch?
There are several important indexes with new DeMark Sequential sell Countdown 13’s on the daily time frame. It’s been a unique year, with 13’s or 9’s seeing nominal reversals of 3-7% that are short-lived. Breaking through some recent support levels, perhaps in early 2026, might create better oversold conditions for buying opportunities.
A few clues are happening with some rotation. First, what hasn’t changed – metals and miners remain strong although they are stretched with GDX with a new Combo 13. Large-cap banks are bid while regionals are flat. Consumer discretionary is toppy while XLY is buoyed by Tesla, which is a touch over 20% weight. Consumer staples trade poorly still and might be decent bounce candidates in 2026 (I started with a small CLX long position). Several retailers are weak today but were strong recently. (I added Macy’s as a new short recently, and it’s down 4.3% today). Bitcoin is off its earlier highs and has been a decent signal of selling that has spread into the risk-on sectors. Tesla, the rock in my shoe, is up on a few small news stories, yet nothing significant. Quietly, as the sell side does at the end of each quarter, analysts are lowering delivery estimates for the quarter. I still expect them to report a terrible quarter on every metric. The best metric is the “hope for future things.. that don’t exist” that continues to drive the call buyers. Most people who are buying Tesla, as they say, don’t care about fundamentals, yet I think 2026, with potential for losses, might wake people up.
I am still working on my 2026 expectations/predictions, but one issue I will cover is the problem for the administration, Treasury, Fed, small/mid cap refinancing, and housing markets – higher rates on the 10 and 30-year yields. Rates are up 2 bps again today. I am also watching the labor market which has been weakening with the unemployment rate at 4.6% up from 4.1% which triggered a new Sahm rule. A recession signal is triggered when the 3-month moving average of the U.S. unemployment rate rises by 0.50 percentage points or more above its lowest level in the previous 12 months. There has been little, if any, discussion about it, and indeed, “a recession ahead” is far off the radar or in strategists’ research notes.
2026 is going to be an interesting year, different from this year, with more rotation, more volatility, and greater demands for more than just announcements of deals, future revenue potential, or stocks that are ridiculously valued for things that don’t exist. If I am correct, the dramatic increase in market caps over the last year or the previous two years has a lot of air pockets.
I added some individual stock charts below that I am watching or involved with. I will be on with Maggie Lake on YouTube at the close today. As a reminder, I will publish the notes tomorrow, then take some family time, and return next Sunday for the Week Ahead note.
Stocks: Mostly sideways today after the open, with the opening price higher than the current price a touch lower. I always like to see the closing price higher than the opening price, by the way. Short baskets are seeing some squeezing in risk on sectors.
Bonds: Rates are up about two bps and are at or above pre-Fed meeting levels.
Commodities: Mostly higher with Crude up 2.5%, Natural Gas was up earlier and down 0.1% but well off lows. Copper is down 0.25%. Gold is up 1.8%, Silver up 1.3%.
Currencies: US Dollar Index is down 0.25%. Bitcoin is now down 0.5% reversing earlier gains of 2%.
Current Portfolio Ideas:
Changes: The sideways action still has the short term SPY and QQQ momentum indicator on buy signals from last week.
Thoughts: The new Sequential 13’s keeps me optimistic that indexes will give us another attempt to pull back.
US INDEXES
S&P futures 60-minute tactical time frame with recent 13’s and Setup 9’s. A bit stronger vs NDX
S&P 500 Index daily had a recent Sequential sell Countdown 13
S&P futures daily did qualify the Sequential sell Countdown 13 today
S&P 100 is the meat of the S&P and looks more like the NDX with a new Sequential sell Countdown 13 after topping in October
Nasdaq 100 futures 60-minute tactical time frame with a cluster of new sell Countdown 13’s stalling the advance
Nasdaq 100 Index daily with new Sequential sell Countdown 13
QQQ with new Sequential 13
Current Portfolio
ADBE is a recent new long ieas I added lower and want to see this clear the 200 day at 364. This one has been one of the worst SW names in 2025 and might be one of the best in 2026
I round tripped the RRC Range Resources and want to get one more new high over 40 for breakout potential. I missed that but with the new buy Setup 9 I still like it and might add more in the new year.
PCT Pure Cycle remains a long and I would like to see this clear the recent highs and more importantly for me the 10.28 TDST Setup Trend red dotted line
CVNA was added to the S&P 500 on the open today and is fading. I expect it to continue to fall as I am hearing the ABS deals have an increase in defaults and off loading their financing might become more difficult.
C Citi is stretched with a new Combo 13. I don’t have a position but it’s very overbought with RSI elevated too.
INTC had a Combo 13 at the recent high and has been moving lower. This company despite the new holders including the government has a very weak business right now and a turn around will take years.
AMD has moved sideways and I’ll remain short if this can break the recent wave 3 low. (yellow 3)
AVGO remains well off the highs trapping a fair amount of people higher. A break of the recent lows could see an air pocket lower
M Macy’s fading after recent sell Countdown 13’s. Not atypical after the early holiday shopping rush.
PLTR reversal off the opening today
PLTR weekly with new Sequential sell Countdown 13. This saw pullbacks the last two times with this signal. I really wanted this to break 150 as it’s the most grossly overvalued stock in the S&P and there are plenty of candidates.
STX has been moving sideways after a torid move. DRAM spot prices are quietly coming down – not enough for many to notice yet.
WDC has a recent Sequential sell Countdown 13 and has moved sideways. A break of the 20 day would be a first signal of this falling more.
Tesla did qualify a new Combo sell Countdown 13 today. Two versions
Tesla now is trading at a PE of 305x earnings. Sequential on day 12 of 13. Again the longs in this don’t look at fundamentals.
If you want downside potential and don’t want the rock in your shoe feeling being short Tesla, XLY has 20% weight with TSLA. New sell Setup 9
Hedge Fund Telemetry ETF Percentage Price Oscillator Monitor
The PPO monitor (percentage price oscillator) force ranks ETFs by percentage above/below the 50-day moving average. This monitor and others are offered to Hedge Fund Telemetry subscribers on Bloomberg. Metals and miners remain strong albeit overbought above the 50 day. Seeing a few key sectors slip back or under today’s VWAP levels. A lot of ETFs ex dividend today.
Index ETF and select factor performance
ETF with today’s performance with 5-day, 1-month, and 1-year rolling performance YTD.
Goldman Sachs Most Shorted baskets vs. S&P Indexes
This monitor has the S&P indexes and the Goldman Sachs most shorted baskets. Short baskets are mostly higher in the risk on sectors. The gains for short baskets in the last 5 days and 1 month have moderated.
DeMark Observations
Within the S&P 500, the DeMark Sequential and Combo Countdown 13s and 12/13s on daily and weekly periods. Green = buy Setups/Countdowns, Red = sell Setups/Countdowns. Price flips are helpful to see reversals up (green) and down (red) for idea generation. The extra letters at the end of the symbols are just a Bloomberg thing. Worth noting: Seeing some of the beat down sectors with some buy Countdown 13’s and some overbought with both Sequential and Combo sell signals – a few financials to watch.
Major ETFs among a 160+ ETF universe. QQQ with new Sequential sell Countdown 13. GDX with new daily and weekly Combo 13’s
If you have any questions or comments, please email us. Data sources: Bloomberg, DeMark Analytics, Goldman Sachs, Street Account, Vital Knowledge, Daily Sentiment Index, and Erlanger Research