To The Moon

$S&P 500(.SPX)$ $NASDAQ(.IXIC)$ $Dow Jones(.DJI)$ I’m entering December with a firm read on the tape’s pivot, structural momentum locked in as of 01Dec25 Auckland time, supported by liquidity, repositioning flows, and calendar tailwinds that historically deliver asymmetric upside in the final weeks of the year.

The convergence of inbound capital, dealer balance sheet adjustments, and year end rebalancing tightens the setup for sustained drift over the next four weeks, even as volatility pressure builds under the surface.

S&P 500 Thanksgiving week flips the script

Thanksgiving week delivered a crisp +3.73% advance for the S&P 500, the strongest seasonal pop since the +12.03% outlier in 2008, using the 28Nov25 close. November still finished positive despite a minus 4.5% mid month pullback, a pattern that has only appeared 28 times since 1962. In those cases, the index was higher in 79% of the following 30 day windows, with a median gain of 1.88% and supportive follow through over 3 and 6 months. UBS projects 14% EPS expansion for 2026 and sets an MSCI ACWI target of 1090 into end 2026, implying about 11% upside for global equities as $SPX $IXIC $DJI and peers benefit from AI driven productivity and capex cycles. UBS also frames Gen AI as “the steam engine of the mind,” assigning a 35% probability of a full bubble forming. On the technical side, RSI sits in the mid 50s, MACD is curling higher, and key support aligns near the November 5200 region, with 5150 as the stress line.

The tape is signalling a constructive momentum regime rather than a one off squeeze. Short dated options desks have rotated from neutral pinning to mild upside sponsorship, with call notional building around Dec 5400 to 5500 $SPX strikes as of 29Nov25. That shift adds incremental positive gamma into strength.

My short term base case allocates 60% probability to a measured grind toward 5450 resistance by mid December, 25% to a choppy 5200 to 5450 range, and 15% to a downside break that takes price back through 5150. A Fed dot plot that leans into roughly 85% odds of a December cut, per CME FedWatch after recent Fed commentary, remains the macro backstop and keeps the US in the leadership seat.

Options ecosystem volume explosion meets clearing bottlenecks

Monthly average daily options volume reached about 70M contracts in October 2025, the high for the year and the capstone to nearly six straight record years, according to Options Clearing Corp data. The US options market is approaching a sixth consecutive record, yet regulators and exchanges are flagging “concentration risk” as a handful of banks, including BofA, $GS, and ABN Amro, now account for nearly half of the OCC default fund. Bloomberg on 30Nov25 highlighted that the top five clearing members absorbed close to 50% of Q2 default fund contributions, with these three banks taking the bulk. This narrowing of risk capital raises sensitivity to any counterparty strain.

Intraday price action reflects that crowding. Short dated contracts dominate flow, and concentrated gamma repeatedly pulls the index into fast intraday swings as dealers hedge. Realised volatility is pressing toward the 12% to 15% monthly zone instead of the sub 10% regime that characterised calmer periods. Skew has scope to steepen into year end if thin holiday liquidity meets one sided positioning. Regulatory focus on clearing concentration could also cap risk taking in stress, turning liquidity more fragile exactly when large hedges are in play.

My base case assigns 55% probability to this elevated but controlled volatility backdrop persisting into early January, 30% to a further vol pick up if a macro headline collides with crowded weekly options, and 15% to a volatility crush if data and Fed tone stay benign. The trigger for the more volatile path would be a sharp widening in spreads or a disruption announcement from a major clearing member, while an orderly December Fed meeting would keep the controlled scenario in place.

Seasonal edges and forward trajectories tilt green

The historical matrix that looks at months where the S&P 500 closes positive despite a minus 4.5% intramonth drawdown shows a powerful pattern. One month forward returns have been positive in 79% of cases since 1962, three month and six month periods delivered average gains of 4.38% and 6.42%, and one year outcomes have been positive 82% of the time with an average near 15.49%. The latest signal, Nov2025, now sits alongside episodes like Mar2009, Jul2009, and Apr2020 where strong forward returns followed deep drawdown reversals. Daily thrust compression is easing, and breadth has begun to improve with early signs of rotation into smaller caps and cyclicals, while mega cap AI leaders still anchor the index.

The tape reads as one of upside persistence with defined risk rather than unchecked euphoria. For the next four to six weeks I place a 60% probability on continuation higher with higher lows forming above 5200, a 25% probability on a sideways consolidation that digests gains between 5150 and 5450, and a 15% probability on a deeper retrace that undercuts 5150 and tests the prior volume shelf. The trigger for the constructive path is a sustained hold above 5200 into mid December, while a daily close under 5150 would push the odds toward the corrective scenario. Macro risks remain centred on any upside surprise in US inflation or a reversal in rate cut expectations that would compress the multiple expansion now baked into indices.

I’m aligning my December playbook with this lattice of index strength, options flow concentration, and probabilistic seasonality, because leadership in $SPX is already bleeding into $IXIC, $DJI, and global proxies tied to ACWI, and that transmission through derivatives and earnings expectations makes the next month a critical window for disciplined risk taking rather than passive exposure.

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