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Holiday Trade Alert — Thin Markets, Easy Rips, and a Screaming Buy Below
Danny Riley
December 23, 2025
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Our View
We have another round of delayed data coming out today, which I feel confident in saying will be another round of government fake news. Even if the numbers do come out bad, I don’t think it will change the upward path. Including today, there are 6 trading days left in December: a full session today, an early close on Wednesday at 1:00, Thursday closed for Christmas, Friday is a full session, and Monday, Tuesday, and Wednesday next week are all full sessions.
The end-of-quarter rebalance can be a significant date for individual investors and fund managers engaging in year-end portfolio rebalancing. That all said — if you thought Monday was slow, just wait for today.
Our Lean — Danny’s Trade (Premium only)
Guest Post: Tom Incorvia - Blue Tree Strategies
From my perspective, the S&P 500 (SPY) has not materially changed from last week. While we did see a brief shift in sentiment on Tuesday and Wednesday, that weakness was quickly met with responsive buyers, and selling pressure failed to gain traction. Since early October, price action has remained balanced, reinforcing the idea that the market is still in a consolidation phase rather than entering a new directional move.
The chart continues to show price rotating between a clearly defined high-volume area of demand around 660–665 and a high-volume area of supply between roughly 680 and 686. Despite several attempts to push above the 690 level, buyers have been unable to generate follow-through. To me, this does not look like a market being actively sold; instead, it suggests a lack of urgency or conviction from the buying side. Until demand steps in with greater intent, I expect price to remain range-bound within these established levels.
From my vantage point, while the broader market averages have largely remained balanced over the past few months, I am starting to see pockets where demand is clearly asserting itself. Financials, as represented by XLF, stand out as one of those areas. XLF closed at an all-time high on Monday, decisively breaking out of a well-defined balance area. That is a meaningful development—not just for the financial sector, but for the broader market as well—given the leadership role financials often play during sustained advances.
Looking ahead, my focus is on follow-through. Continued buying is critical, and just as important is what does not happen: prices should not rotate back into the prior value area. A pullback into that former range would suggest a failure of demand and raise the risk that this breakout turns into a false move rather than the start of a sustained trend.
For additional confirmation, I am also watching individual names within the sector, and several are already validating the breakout in Financials. There are at least three stocks posting all-time closing highs, reinforcing the idea that this move in XLF is being supported at the component level. When leadership expands beyond the ETF and into individual names, it adds credibility to the breakout and increases the odds that demand is genuine rather than short-lived.
You can purchase Tom’s Course on Volume Profile here.
Market Recap
As expected after Friday’s firmer close, the ES traded up to 6923.75 on Globex and opened Monday’s shortened holiday trading week at 6921.50, up 33.25 points or +0.51%. After the open, the ES traded 6916.25, pushed up to 6927.75, pulled back to 6911.75 at 9:40, traded up to 6923.75 at 10:00, and dropped to a new low of 6910.75 at 10:10.
It rallied to 6923.25 at 10:30, pulled back again to a new low at 6908.75, rallied back up to 6922.25, made one more push down to a new low by one tick at 6908.50, and then rallied up to 6932.50 at 11:20.
From there, the ES traded 6926.00, then up to 6933.50 at 12:00, ranged in a 5-point band, and made the high of the day at 6936.50 at 12:55. The ES slowly traded back down to 6924.25 at 2:15, then back up to a higher low at 6932.50 at 2:35. It flatlined in a 4- to 6-point range into the close, traded 6930.00, and the 3:50 cash imbalance showed $2.3 billion to buy. It traded 6929.50 on the 4:00 cash close and settled at 6930.25, up 43 points or +0.62%, marking the third session in a row of gains — up a total of 151.75 points or +2.22%.
The NQ settled at 25,692.25, up 117.50 or +0.46%, also logging its third consecutive session of gains, totaling 766.50 points or +3.16%.
In the end, it’s been a non-stop buy program. In terms of the ES and NQ’s overall tone, both markets remain extremely firm. In terms of the ES’s overall trade, volume was low at 932K.
While the index markets have been rising, so has gold (GCG26), which hit new highs amid rising geopolitical tensions: fading prospects for a Ukraine ceasefire, the US–Venezuela oil embargo, and China–Japan tensions. It made a low of $4,338, on 12/18, a high of $4,461.40 on 12/19, then traded up to $4,447.60 on 12/22, and hit $4,530.80 on Globex last night — a 193-point rally over three sessions.
Silver hit an all-time record high of $59.06 per ounce, surpassing the previous all-time high of $49.95 (or an intraday high of around $50.50) set on January 17, 1980.
The dollar (DXY) weakened to 98.069, down -9.26% YTD. Bitcoin traded down to 87,864.
Today’s Economic Reports
8:30 am — GDP (delayed report), Q3: 3.2% vs. 3.8%
8:30 am — Durable Goods Orders (delayed report), Oct.: -1.1% vs. 0.5%
8:30 am — Durable Goods ex-Transportation, Oct.: — vs. 0.6%
9:15 am — Industrial Production, Oct.: 0.1% vs. 0.1%
9:15 am — Capacity Utilization, Oct.: 75.9% vs. 75.9%
9:15 am — Industrial Production, Nov.: 0.1% vs. NA
9:15 am — Capacity Utilization, Nov.: 76.0% vs. NA
10:00 am — Consumer Confidence, Dec.: 91.7 vs. 88
MiM
Market-on-Close Recap – MiM
The Market-on-Close auction opened with a clear buy-side skew and maintained that tone through the early part of the imbalance window, before transitioning into a more rotational, selective finish. At 15:51 ET, total net imbalance surged to roughly $2.1B, driven by $3.78B in buy interest versus $1.64B in sell pressure, with nearly 700 symbols participating. While this was decisively positive, the structure beneath the surface showed an active tug-of-war rather than a one-way squeeze.
As the auction progressed, buy dollars steadily tapered, falling from the $3.7B–$3.6B zone toward just under $1.0B by the 16:00 print. Sell imbalances also compressed meaningfully, signaling that sellers were not pressing aggressively into the close. The net result was a constructive but cooling auction, consistent with late-day rebalancing rather than forced positioning.
Sector flows reinforced this interpretation. Communication Services led with a +97.6% dollar lean and a +75% symbol skew, highlighting broad participation rather than a handful of names. Financials (+74.2%), Industrials (+73.5%), Healthcare (+81.8%), and Consumer Defensive (+69.4%) all showed strong buy-side bias, suggesting diversified institutional accumulation. Technology, despite heavy gross selling in individual names, still registered a +64.6% dollar lean, indicating rotation within the sector rather than outright liquidation.
On the sell side, notable pressure appeared in high-profile technology and consumer names, including AMD, NVDA, ASML, GM, and ABNB. Several of these names showed dollar imbalances large enough to matter individually, but they were counterbalanced by equally significant buy imbalances in AAPL, MSFT, META, AMZN, and PEP. This offsetting behavior kept overall sector leans positive while masking substantial single-stock two-way trade.
Importantly, many sector and symbol leans clustered near the ±50–65% range, a hallmark of rotational activity rather than wholesale risk-on or risk-off behavior. In short, the MOC reflected orderly buying, active rebalancing, and broad participation, with institutions distributing and accumulating simultaneously as the market settled into the close.
Technical Edge
Fair Values for December 23, 2025:
SP: 53.15
NQ: 229.23
Dow: 321.67
Daily Market Recap 📊
For Monday, December 22, 2025
NYSE Breadth: 73% Upside Volume
Nasdaq Breadth: 66% Upside Volume
Total Breadth: 67% Upside Volume
NYSE Advance/Decline: 63% Advance
Nasdaq Advance/Decline: 62% Advance
Total Advance/Decline: 62% Advance
NYSE New Highs/New Lows: 143 / 40
Nasdaq New Highs/New Lows: 198 / 153
NYSE TRIN: 0.65
Nasdaq TRIN: 0.81
Weekly Breadth Data 📈
For Week Ending Friday, December 19, 2025
NYSE Breadth: 48% Upside Volume
Nasdaq Breadth: 51% Upside Volume
Total Breadth: 50% Upside Volume
NYSE Advance/Decline: 43% Advance
Nasdaq Advance/Decline: 39% Advance
Total Advance/Decline: 40% Advance
NYSE New Highs/New Lows: 233 / 98
Nasdaq New Highs/New Lows: 352 / 554
NYSE TRIN: 0.81
Nasdaq TRIN: 0.60
ES & NQ Levels (Premium only)
Calendars
Economic Calendar
Today
Important Upcoming
Earnings
NONE
Recent
Trading Room Summaries
Polaris Trading Group Summary - Monday, December 22, 2025
Yesterday's session was defined by low volatility, light holiday volume, and a clear bullish bias that played out according to plan. The room capitalized early on a well-anticipated Continuation Long, with traders locking in +5 to +10 points. PTGDavid guided members to stay aligned with the long side and warned against overtrading—a valuable reminder during thin, end-of-year conditions.
Trade Plan Review (Shared by Manny Pre-Market):
Support Buys:
6900–6904
6875–6879
6850–6854
Each with criteria based on delta behavior, absorption, and failed breakdowns.
Continuation Long 6915–6919
The day's main trade and profit driver.
Resistance Sell 6950–6954
Not tested due to the slow upward grind.
LB&F 6900
Also not triggered, as price stayed comfortably above that zone.
Key Positive Trades from the Day:
Continuation Long 6915–6919 (ES)
This was the standout setup of the day.
Manny called the long early, and traders reported solid gains:
+5 pts at 9:05 AM
+7 pts by 9:20 AM
+10 pts by 9:32 AM
The level even held on a second test later in the morning, showing strong buyer support and validating the setup.
Lessons Learned:
Stay with the Trend:
David noted multiple times that the bears had “no bite,” and sticking with the long bias proved highly effective.Avoid Overtrading in Holiday Tape:
Thin liquidity rewarded patience. David cautioned against forcing trades—a critical point in environments like this.Respect Structure and Flow:
Trade #5 worked beautifully because it aligned with both pre-market planning and real-time order flow cues. This reinforced the importance of entering with context and confirmation.
Additional Notes:
The day wrapped with a $2.3B MOC buy imbalance, confirming bullish dominance.
David summed up the session well: “Low volatility session... bulls own the road... do not overtrade.”
He also noted that this “Thin to Win” rhythm is likely to continue through year-end—plan accordingly.
Overall, a clean day for those who stuck to the plan and exercised patience. Let's carry that discipline into the final trading days of the year.
Discovery Trading Group Room Preview – December 23, 2025
Today is a key catch-up day for delayed U.S. government data, with several important economic reports due:
8:15am ET – ADP Employment Change (tentative due to holiday)
8:30am ET – Q/Q GDP, GDP Price Index, Durable Goods Orders
9:15am ET – Fed's Capacity Utilization & Industrial Production (Oct & Nov)
10:00am ET – CB Consumer Confidence, Richmond Fed Manufacturing Index
These reports are expected to shed light on economic resilience amid rising living costs and the recent government shutdown. Signs suggest strength among higher-income households benefiting from the stock market, while smaller businesses, like iRobot, are struggling—iRobot is set to be acquired by China’s Picea Robotics.
Metals Market:
Gold and silver continue to surge—gold up over 70% YTD, silver above $70/oz—positioning themselves as safe-haven assets amid global currency inflation.
Market Conditions:
No major earnings today or tomorrow. With the holidays approaching, expect declining volume and volatility. ES has a 5-day average daily range of 82.25 points, but this is likely to shrink sharply.
Technical Levels (ES):
Resistance: 7070/75, 7485/90
Support: 6809/14, 6698/93, 6346/41
50-day MA: 6858 (light support)
Whale bias: Bearish into the 8:30am data release amid light overnight large trader volume.
The ES remains within a short-term uptrend channel, offering room for both bulls and bears today.
