Minor Pullback To Set Up New Highs
Friday was one ugly day, especially in the popular and sexy AI space which got hit very hard. It is amazing that these one day plunges are so often accompanied by calls of a 10% correction or a bear market or worse. Then stocks recover and the bears hibernate again. Rinse and repeat.
I don’t like the fact that a number of key indices got right back to the old highs and failed. And until we see new highs across the board, I will have the same small concerns. However, I continue to believe that the indices will gather themselves and run to fresh, all-time highs into 2026.
Seasonally, we often see a pullback with a low around December options expiration which is this Friday. Anytime I see minor weakness in December I look at the calendar in the week surrounding expiration to buy. With pre-market indicating a higher open, I would not view that as the optimal moment.
Volatility is below. The VIX barely moved during Friday’s big down day. And yes, the calendar has something to do with it because December is an historically quiet month as well as being closed one day and a half day before.
Finally, the QQQs are below. Volume often spikes at or near lows.
A quick move below Friday’s low should be expected this week.
On Friday we bought SSO and more MQQQ.
