SPX Trade Plan — December 23, 2025
It’s two days before Christmas and we’re wondering if Santa is showing up to give us a Santa Rally. What is the Santa Rally and why does it persist?
Historically, the “Santa Claus Rally” is defined as a specific seven-day trading window encompassing the last five sessions of December and the first two of the new year. Since 1950, the S&P 500 has averaged a 1.3% gain during this period, finishing higher nearly 79% of the time. The phenomenon persists due to a convergence of institutional “window dressing,” the exhaustion of tax-loss harvesting sell pressure by mid-month, and a low-liquidity environment that allows retail optimism to drive prices higher with less resistance. Notably, because 2023 and 2024 failed to produce a rally, 2025 faces unique pressure; historical data spanning 75 years has never seen a three-year “no-show” streak, suggesting the odds for a bid are currently at a statistical maximum.
Similar to my note last week about Lunar Cycles, we can use this information as a guide (or entertainment), but we must trade what is presented in front of us. Beyond the New Moon or Santa’s cheer, I am increasingly convinced we are headed higher in the near term.
For the past three weeks, I’ve detailed the path that brought us here:
Now that the structural “cleanup” toward the 6764 and 6726 zones is complete, the market has officially survived the gauntlet. With sentiment turning bullish over the last three weeks and positioning in tech stocks rising, we are seeing the “real” breakout move finally take hold into a thin-liquidity environment.
For today’s trading, we are navigating yet another session dictated by “Captain Condor’s” massive position. This whale’s doubling-down has effectively pinned the market, creating a dominant GEX range between 6850 and 6905.
Execution Levels
Long Plan
- Reclaim: Through 6880 sets up a move to 6884, 6888, 6894, and 6900.
- Continuation: Through 6900 targets 6910, 6920, 6926, and finally 6950.
- Dip Buy: 6856, 6837, 6826, 6807.
Short Plan
- Breakdown: Below 6862 targets 6856, 6852, 6849, 6844 and finally 6837.
- Extension: Below 6837 targets 6826, 6819, 6814, 6807, 6798.
- Flush: I don’t foresee a move below 6798, but if it breaks, look for a rapid decline to 6780 and 6775.
- Resistance (Short Fades): 6868, 6875, 6894.