Here's the Right Move as Selling Pressure Builds and Santa Fails to Deliver
With end-of-the-year pressures making it difficult for short-term traders to gain traction, let me give you my best advice.
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Investors have been overly anticipatory in looking for a Santa Claus rally, which has helped to create a "sell-the-news" dynamic. With just two full-day sessions left in 2025, stocks are mixed as investors focus primarily on tax moves and positioning rather than trying to pad gains by chasing a Santa Claus rally.
This is very difficult action for short-term traders as it is quite random and has little to do with either fundamentals or technical patterns. There is selling driven primarily by tax consequences and buying to position for the year ahead, but the selling pressure tends to be more dominant, especially if there is fear that there will be increased pressure to sell some of 2025’s biggest winners once the calendar rolls over.
While there may still be an attempt at generating some positive Santa Claus action, year-end pressures are likely to prevent strong positive momentum from developing. A rally is highly likely to trigger more profit-taking by folks who were too optimistic about year-end strength and also by big players looking to position for 2026.
My best advice is not to try too hard to catch a short-term move right now. The market is just too random and mixed, and better technical patterns aren’t going to develop until we are into early January.
The business media is primarily focused on predicting what will happen in 2026, which is very interesting, but it is not actionable in the short term. Although I'm compiling watch lists and contemplating various themes, I'm prepared to be patient and wait for the end-of-the-year pressures to relent.
We have a mixed start early on Tuesday with little news flow.
At the time of publication, Rev Shark had no positions in any securities mentioned.
