STOCK MARKET BULLISH -- LONG -- CAUTION

Merry Christmas. Keybot the Quant remains long as the holiday joy sends the stock market to new highs. The SPX prints a new all-time high at 6937.32 and new all-time closing high at 6932.05. The bears are tapped in the head by Santa's boot, like little Ralphie, and fall down the chute.

The Santa rally begins, up +0.3% so far, at Christmas Eve and runs through the first 2 days of the year. 1/2/26 would button the Santy rally up nicely on the Friday but let it ride into the Monday and typically the expectation is for US equities to be up marginally in this period or as much as a percent and a half.

The bulls are in charge with the algo number 15 points above the signal line. The utilities are the only thorn in the bull's keister.

Tomorrow is the last trading day of the week. UTIL 1101.14 is the key bull/bear line in the sand this week but next week it changes to 1088.89 and the 1101 is meaningless. Thus, mathematicians say thus a lot, that is why the invitation to the holiday party apparently got lost in the mail, watch UTIL, or DJU, 1089. It will tell you a lot about next week. UTIL begins at 1072.

If UTIL ends tomorrow below 1089, it sets up a negative week for the last week of the year for stocks. If UTIL runs above 1089, the bulls are unstoppable and plan on driving stocks straight vertical with a strong rally so obscene it will make Caligula blush. Bears must keep UTIL below 1089 over the coming days, through next week that is New Year's week, and they will have an easier path to wreaking havoc in January.

At the same time, if utilities are in a sour mood tomorrow, and UTIL drops below 1060, the other bull/bear line in the sand for utes, stocks will drop like rocks and there will be Hell to pay to begin the new year. Negativity will increase quickly.

Interestingly, despite the new highs, the bears can take it if they want it. If UTIL drops below 1060 tomorrow, and if the SPX falls below 6905 trending lower, Keybot the Quant will likely flip short. Utilities are running the show since they are the only negative thorn in Santa's rump. As utes go, so goes the stock market.

Only four trading days remain in 2025 and 2026 trading begins in only 8 calendar days, a week away, on 1/2/26. Commodities are running hot creating a potential problem for the Fed going forward. For now, the Federal Reserve maintains its jackboot on the throat of volatility to keep stocks buoyant through the holidays.

12/28/25; 7:00 PM EST =
12/23/25; 10:00 AM EST = +40; signal line is +25
12/22/25; 11:06 AM EST = +39; signal line is +24