The Santa Claus rally started early this year and continued higher with the SPY, DIA, and QQQ up over 1% for week and SPY closing at all-time highs and gaining 18% for the year. IWM lagged.
The runup in precious metals continued with gold and silver at record highs. Our ETF Investment Letter is long GLD, GDX, SLV, and PALL, all doing great!
The CBOE Volatility Index (VIX) closed at 13.60 on Friday, with weekly/monthly breakdowns and its lowest close in more than a year, showing lack of fear (complacency).
The S&P is not cheap, trading at 25 forward earnings.
The recent GDP released on Dec. 23 showed the U.S. expanding at the fastest level in two years. Some question the reliability of the data, but it also raises concerns about inflation and rate cuts in 2026.
On the release, the broader markets retraced while Treasury yields rose and energy stocks and gold moved higher.
Barron’s noted that spending on AI categories—software, data centers, R&D, etc. accounted for 14% of Q3 GDP, and 37% of real GDP growth through the first nine months of 2025. GDP has climbed 2.1% through the first three quarters of the year, but without all that AI spending, it would have only risen 1.5%. Interesting how this will play out in 2026.
Trump keeps touting that costs are coming down and the Affordability Crisis is a hoax. With only 30% of Americans supporting Trump on the economy, they aren’t believing it.
Health care premiums for more than 20 million Americans will, on average, more than double in 2026, while Congress left Washington for the year without extending Affordable Care Act subsidies. Rising health care is a real problem that politicians are unable to address. This will force talk of another government shutdown in January and likely hurt Republicans in next year’s mid-term elections.
This coming week is another holiday-shortened week with markets closed at 1 ET on Wednesday and on Thursday for New Year’s Day. Last week had thinner volume with the Christmas holiday.
Considering it’s a holiday week into the end of the year, there should be little risk of a significant move lower but a questionable probability of moving much higher in light of the recent strength from 12/17.
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Good trading.
TREND MATRIX
I reviewed the Trend Matrix in the video below
S&P Sector ETFs – Sorted by Weekly Percent Change
Last week’s percentage changes.
The percentage changes tell you which sectors were the strongest or weakest on Friday and for the week, month, quarter, and year.
There are seven columns after the percent changes in the sector listed above.
You can see the ETFs that are the strongest getting stronger or weakening.
- Close above or below the 20-MA.
- Close above or below the 20-MA 5 Days Ago. C>20 -5
- Close above or below the 50-MA.
- Close above or below the 50-MA 5 Days Ago. C>50 -5
- 20-MA above or below the 50-MA.
- 20-MA is pointed up, and the close is above the 50-MA
Other ETF Sectors – Sorted by Weekly Percent Change
See the Video Below
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VIDEO REVIEW OF ETF SECTORS - Click lower right to open Full Screen.
NEW ETF TRADE IDEAS
12/29: Vanguard Health Care ETF (VHT) – Over $290.79, consider buying the ETF. Breakout at the 20-MA, bullish weekly. Stop $284.74.
OPEN AND CLOSED ETF POSITIONS WITH TRADE UPDATES (NOTE: Also in Member's Area in Open/Closed Trade Sheet)
12/22: Grayscale Ethereum Trust ETF (ETHE) – Bought a ½ lot of the ETF at $25.09. Breakout from bullish reversal at the 20-MA, bullish retest weekly, Buy Setup monthly. 12/27: Buy ½ over $25.22. Stop $21.95.
11/10: VanEck Gold Miners ETF (GDX) - Bought a 1/3 lot of the at $74.85. +Gap Breakout at the 20/50-MA, bullish weekly. 11/12: Bought 1/3 at $77.32. 11/17: Bought 1/3 at $76.92. 12/26: First 1/3 target is $94.75. Move Stop $85.55.
11/25: SPDR Gold Shares (GLD) - Bought the at $380.59. Breakout at the 20/50-MA, bullish weekly. 12/26: First 1/3 target is $422.50. Move Stop $405.71.
12/3: abrdn Physical Palladium Shares ETF (PALL) - Bought the ETF at $134.03. Breakout, Bull Flag consolidation weekly. 12/17: Sold 1/3 at $149.27. 12/23: Sold 1/3 at $169.80. 12/26: Move Stop $165.72.
11/17: State Street SPDR S&P Health Care Equipment ETF (XHE) – Bought the ETF at $82.71. Buy Setup at the 20/200-MA, Breakout weekly/monthly. 12/13: Move Stop $87.18.
12/23: State Street Com Svc Sel Sec SPDR ETF (XLC) - Bought a 1/2 lot of the ETF at $117.54. Breakout at the 20-MA, bullish weekly/monthly. 12/24: Bought 1/2 at $117.56. Stop $115.72.
Master Trader and You Building Your Financial Future Together!
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra Managing Director of Master Trader
Dan Gibby Chief Options Strategist
NOTE: Master Trader will show the opening and closing prices of all stock and options trades. We recommend that all traders and investors use proper share sizing for positions and money management. However, we cannot recommend what that is for your particular trading style, risk tolerance, or account balance. We urge you to calculate your own share/position size based on your individualized risk parameters, Trading Plan, and familiarity with the proposed trade strategy and risk. Advanced Management Strategies (AMS) covers in detail foundation and advanced position and money management.
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