Wall Street is feeling good as the Christmas holiday approaches, but some experts warn that this high might not last. The S&P 500 hit a record close of 6,909.79, up 0.5% on Tuesday. This marks a 17.5% increase for 2025 and sets the stage for its third consecutive year of double-digit gains.
However, Katie Stockton, a chart analyst and founder of Fairlead Strategies, believes we might see a market pullback soon. In a CNBC interview, she noted that since mid-October, the market has lost some momentum. “You feel the ups and downs; it’s more volatile,” she said. While the current trend is not entirely negative, she observed a decrease in intermediate-term momentum, suggesting we could be entering a phase of correction.
Since early October, the S&P 500 has experienced 12 daily swings of over 1%, with seven declines. Stockton indicated that if the index closes above 6,911, it might signal a short-term boost. Otherwise, we may need to be cautious and wait for a better opportunity to invest.
Adding to the uncertainty is the trading volume. This week, it has been low, likely due to the upcoming Christmas break. The SPDR S&P 500 ETF Trust (SPY) traded only 64.84 million shares on Tuesday, significantly below its 30-day average of 86.14 million. In fact, overall trading across U.S. exchanges reached just 14.4 billion shares, compared to the 50-day average of 18.6 billion.
Looking back, similar trends can be seen in previous years. For instance, in 2020, the market also experienced a surge heading into the holidays, followed by a sharp adjustment early the following year, illustrating how festive optimism can sometimes mask underlying volatility.
Market analysts suggest being cautious as we move deeper into the winter months. It’s essential to watch for indicators that could signal a shift in momentum, especially as trading patterns tend to change during holiday seasons. Keeping an eye on broader economic indicators will also help gauge whether Wall Street’s festive spirit can sustain itself into the new year.
For more insights on market trends and investment strategies, you can explore resources like the Securities and Exchange Commission which provide valuable information on navigating market fluctuations.
Source link
SPDR S&P 500 ETF Trust,S&P 500 Index,Earnings,Markets,business news
