Market Pulse: December 1, 2025

The Quick Take

December arrived with a stumble, not a sprint. Today’s session saw nearly three declining stocks for every one that advanced, a notable shift from the broad strength we’ve enjoyed heading into the holiday stretch. But before you hit the panic button, the bigger picture tells a more nuanced story: two-thirds of S&P 500 stocks still sit above their 20-day moving averages, volatility remains remarkably calm, and only one stock is flirting with a 52-week low. This looks more like a catch-your-breath day than a change in character.

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What the Numbers Say

Today’s Breadth: A Reality Check

Metric	Value	What It Means
Advancers	135	Just 27% of stocks gained
Decliners	366	Nearly 73% of stocks fell
A/D Ratio	0.37	Decidedly weak for the day
Up Volume Share	37.6%	Sellers had the heavier hand

This is a markedly different picture from last week’s 5-to-1 advance-decline readings. But single-day breadth can be noisy, what matters more is whether this becomes a pattern. Track the pattern on our breadth dashboard →

The Trend Still Has Friends

Despite today’s weakness, the underlying structure remains supportive:

• 66.9% of stocks above their 20-day moving average (short-term trend healthy)
• 52.2% above their 50-day moving average (intermediate trend neutral-to-positive)
• 60.2% above their 200-day moving average (long-term trend intact)
• 17 stocks near 52-week highs vs. only 1 near a 52-week low

When more than half the index holds above key trend lines after a down day, it suggests buyers may be waiting in the wings rather than heading for the exits.

Volatility: Still Asleep at the Wheel

Index	Current IV	Historical Avg	Read
SPY	11.6%	17%	Low, calm waters
QQQ	15.8%	22%	Normal, tech less complacent
IWM	16.5%	24%	Normal, small caps steady
VIX	17.24	~20	Below average, no fear

The VIX sitting in the low-17s tells us that option markets aren’t pricing in imminent trouble. That’s either reassuring or a reminder that complacency can set you up for a surprise. Hedges remain cheap if you want them. Explore current volatility levels →

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Reading Between the Lines

Why Today Felt Heavier Than It Was

December’s first trading day often brings portfolio adjustments, tax-loss harvesting setups, and institutional rebalancing. Money managers are closing their books, rotating positions, and preparing for year-end. This creates natural selling pressure that can distort single-session breadth readings without signaling a genuine trend change.

The volume skew (37.6% advancing) confirms that sellers were active, but the lack of any spike in volatility suggests this was orderly repositioning rather than panic.

The Moving Average Story

Here’s where today gets interesting. Yes, we had nearly three decliners for every advancer. But:

• Two-thirds of stocks haven’t broken below their 20-day moving average
• More than half remain above their 50-day line
• The 200-day moving average, the line that separates bull markets from bear markets for many traders, is supporting 60% of the index

In plain English: stocks pulled back within an uptrend, not out of one.

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What This Means for Your Positioning

If You’re Looking to Buy

Today’s weakness could offer cleaner entry points in names that have held their moving averages. Look for stocks that declined modestly on lighter-than-average volume, those are the ones where sellers aren’t truly committed.

With implied volatility this low, long calls or call spreads remain relatively affordable. A pullback in a calm volatility environment is often where opportunity lives.

If You’re Already Long

No need to panic, but do take inventory. Stocks holding above their 50-day moving average are showing relative strength. Those breaking below on heavy volume deserve a tighter leash.

Consider whether you want protection. With SPY implied volatility 32% below its historical average, puts are on sale. December brings plenty of potential catalysts, year-end flows, economic data, and the ever-present possibility of headline risk.

If You’re on the Sidelines

This is the kind of day that can shake out weak hands while leaving the trend intact. If you’ve been waiting for a pullback to get involved, the market just gave you a small one. Watch tomorrow’s breadth closely, a bounce with improving advance-decline numbers would suggest today was noise, not signal.

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The Sector View

Today’s weakness wasn’t uniform. Keep an eye on which sectors held up best and which lagged hardest, that rotation often accelerates into year-end as managers position their books.

With the Technology Select Sector (XLK) showing elevated implied volatility at 32.6%, well above its 23% historical average, there may be nervousness around specific names or earnings catalysts. Meanwhile, defensive sectors like Utilities (XLU) are seeing unusually high volatility readings, which suggests some positioning activity rather than a flight to safety. See all sector performance →

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What to Watch Tomorrow

1. Breadth recovery: Do advancers bounce back, or does weakness persist?
2. Volume character: Was today’s selling exhaustive, or just the start?
3. VIX movement: Any uptick from the 17s would warrant attention
4. Moving average tests: Watch for stocks bouncing off their 20-day or 50-day lines

If tomorrow brings a 2-to-1 or better advance-decline ratio with steady-to-lower volatility, today will fade into the noise of December positioning. If weakness deepens, we’ll reassess.

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The Bottom Line

December started with a hiccup, not a heart attack. The nearly 3-to-1 decline ratio looks dramatic in isolation, but the market’s structural underpinnings, moving average breadth, minimal new lows, and tranquil volatility, suggest this is a pause within a continuing uptrend.

Stay attentive but not alarmed. Use the volatility discount to add hedges if you’re nervous. Look for quality names pulling back to support if you’re looking to deploy capital. And remember that December has its own rhythm: year-end flows, tax considerations, and holiday liquidity all add noise to daily readings.

The trend is your friend until it bends. Today, it bent, but it didn’t break.

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