Thanksgiving Rally Delivers – December Supposed To Be Up

Welcome to December. The home stretch for 2025. I hope you had a happy and peaceful Thanksgiving that included great food and football! I have to admit that I was shocked the Cowboys beat Philly and KC in a span of four days, going from irrelevant to playoff contender.

Our family went against consensus and took a family trip to the Cayman Islands for the week that included an awful lot of sun, food, drinks and together time. I don’t think I counted any fights either which may be a record.

The sunsets were as incredible as the food. Each and every day I was speechless.

Finally, as sad as I was to end the trip, I was so excited to board our flight with my second favorite football painted on the outside. Lots of wisecracks about hoping the plane doesn’t crash like the Jets’ season, but alas, the J-E-T-S JETS JETS JETS won yesterday.

Getting back to the real world and why I am here, Thanksgiving seasonal trends certainly played out in picture perfect fashion. The stock market bottomed right on schedule and rallied all week as it was supposed to. Today is seasonally weak day and the pre-market suggests a lower open. However, because it is also the first day of December, I would use early weakness to buy as the market’s tailwind for the week remains in place. And that’s pretty much the theme of December. Buy weakness.

FYI, when December begins in an uptrend, the S&P 500 averages more than 1.5%. That lines up positively against other studies which show an up December when the market is up at this point in the year.

For all the talk of a late year 10% swoon, the S&P 500 is but two days away from the old highs. And remember, all those folks who panic sold during the tariff tantrum have been chasing stocks higher and higher and higher. And now, there is only have one month left to make up for their catastrophic mistakes.

Lest you think all is back to rainbows and unicorns, I still have some issues with the market. I do not think it just launches without looking back right here. But I remain convinced that Dow 50,000 is coming in Q1 2026.

Below is a chart I have shown many times since April. It is simply the S&P against the Russell 2000, big caps versus small ones. I love that the Russell has been outperforming over the past week as stocks have rallied. That’s a decent sign for Q1 2026. The Russell is also in a very seasonally positive time of year.

The banks which were left for dead not long ago are pressing up against the top of their range. What a shot in the arm for the stock market if the banks can squirt higher and lead.

On Wednesday we bought SDS and NJNK. We sold QLD. On Friday we bought QLD. We sold TLT.