Last Call for the 2025 Santa Rally? 🎅 Or Is the Tank Empty?

1. Context: The “Fed Week” Showdown

Friday’s market action was a clear signal: the bulls are back in charge. The US Indices (SPX +0.19%, Nasdaq +0.31%) held firm, and with SPX hovering near ~6,870, we are within striking distance of the psychological 7,000 mark.

But don't get complacent. We have a massive week ahead. The FOMC meeting is this Wednesday (Dec 10), and the market is pricing in an 87% chance of a rate cut. The “Soft Landing” narrative is screaming "Buy," but smart money is already asking: Is this the final melt-up before 2026 reality sets in?

2. Deep Dive: What Matters This Week

1️⃣ The “Buy the Rumor” Setup (Fed Pivot 2.0)

The Green close on Friday suggests the market loved the recent data (likely the NFP "Goldilocks" print). Traders are positioning for a dovish Powell on Wednesday.

* Bull Case: Powell cuts rates and hints at more in Jan/March 2026. This triggers a “Santa Rally” squeeze, pushing SPX to 7,000.

* Bear Case: The cut is priced in. If Powell sounds hesitant about 2026 easing, we get a “Sell the News” event. Watch SPX 6,800 as the immediate support line.

2️⃣ Tech Earnings: The AI Reality Check

While Nvidia has led the charge all year, this week is about the application layer and hardware sustainability.

* Watch $AVGO (Broadcom) & $ADBE (Adobe): Both report this week. Broadcom is the best proxy for AI networking demand outside of Nvidia. If they guide weak, the entire semi sector ($SOXL) could take a breather.

* Adobe is crucial for the "AI Software" narrative. Are companies actually paying for AI tools yet? A miss here hurts the SaaS recovery thesis.

3️⃣ Crypto: The $100K Hangover

Bitcoin has been volatile, recently flushing leverage. While equities are at highs, BTC is struggling to reclaim momentum.

* The Divergence: Usually, BTC and Nasdaq move together. Right now, they are decoupling. This is a warning sign of liquidity fragmentation.

* Key Level: Traders need to see BTC reclaim $95k–$98k quickly. If we linger below, the "Cycle Top" bears will start piling in for a deeper correction into 2026.

4️⃣ China Assets: The Waiting Game Continues

The Hang Seng is chopping while waiting for concrete stimulus details for 2026.

* Strategy: Don't chase the rumors. The risk/reward on $KWEB or $HSI is only attractive after a confirmed breakout above resistance. Until then, it's a trader's trap.

3. Conclusion: Don’t Be Exit Liquidity

The momentum is currently Bullish, but it feels like the "euphoria" phase of 2025.

* Retail is chasing the 7,000 target.

* Institutions are likely using this liquidity to "Window Dress" their year-end books—which means they are selling losers and holding winners, but not necessarily adding aggressive new risk.

My Plan: I am holding my core Tech runners ($NVDA, $TSLA) but tightening stop-losses. I am looking to sell covered calls into any spike post-Fed meeting. This isn't the time to go "all in" on leverage; it's the time to protect your 2025 gains.

4. What Are You Doing?

* Are you holding through the Fed meeting or taking profits now?

* Do you think SPX hits 7,000 before New Year’s Eve?

* Is the Crypto bull run over, or just reloading?

👇 Drop your strategy in the comments! Everyone stands a chance to win Tiger coins! 🐯💰

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