Market Pulse: December 3, 2025

The Quick Take

Yesterday we asked for breadth parity, a return to a positive advance-decline ratio. What we got was much better, a decisive 2-to-1 advance-decline ratio that erased the early December wobble and then some. 337 stocks climbed while just 165 declined, the strongest breadth reading we’ve seen since the November rally peaked. Volume backed the move with nearly 65% of trading activity in advancing stocks. Add in 35 stocks printing near 52-week highs against just one near a low, and the message is clear: the market isn’t just recovering, it’s accelerating.

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What the Numbers Say

Today’s Breadth: Decisive

Metric	Value	vs Yesterday	What It Means
Advancers	337	+121	67% of stocks gained
Decliners	165	-121	Sellers overwhelmed
A/D Ratio	2.04	+1.28	Strongly positive
Up Volume Share	64.9%	+13.7pp	Heavy conviction

The transformation from yesterday’s cautious half-recovery to today’s broad-based surge couldn’t be more stark. A 2.04 advance-decline ratio means two stocks advanced for every one that declined, the kind of participation that underpins sustainable rallies. Perhaps more impressive, the volume ratio hit 1.86, with $1.71B flowing into advancing stocks for every $0.92B in decliners. When both breadth and volume align this strongly, it’s not a fluke. Track the pattern on our breadth dashboard →

The Trend: Reclaiming Ground

Moving average breadth recovered its footing:

• 67.6% of stocks above their 20-day moving average (up from 64.6%, back to healthy levels)
• 53.3% above their 50-day moving average (up from 50.7%, solidly in bull territory)
• 61.0% above their 200-day moving average (up from 58.5%, long-term trend intact)
• 35 stocks near 52-week highs vs. only 1 near a 52-week low

That 35-to-1 high-low ratio is exceptional. When the market generates 35 times more new highs than lows, it’s telling you leadership remains broad and the bid under quality names is strong.

Volatility: The Calm Deepens

Index	Current IV	Historical Avg	Read
SPY	11.2%	17%	Low, 34% below average
QQQ	14.7%	22%	Low, tech settled
IWM	18.4%	24%	Normal, small caps relaxed
VIX	16.08	~20	Below average, no stress

The VIX ticked down further from 16.59 to 16.08, officially in the “markets aren’t worried about anything” zone. SPY IV remains stubbornly cheap at just 11.2%, making portfolio protection about as affordable as it gets. Explore current volatility levels →

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Reading Between the Lines

The Breadth Breakout

Let’s put today’s move in context. After two consecutive sessions of negative breadth to start December, many wondered if the November rally had run its course. Today’s 2.04 A/D ratio isn’t just a rebound, it’s a statement.

The sequence matters: Day 1 brought a 0.37 A/D ratio (weak), Day 2 improved to 0.76 (better but still negative), and Day 3 delivered 2.04 (decisively positive). This progression from compression to expansion is exactly what healthy markets do. They test support, find buyers, and then reward those who stayed patient.

Following Up From Yesterday

Yesterday’s checklist:

1. Breadth parity: ✓ Crushed it. Not just parity, but 2:1 domination.
2. Volume confirmation: ✓ Two consecutive bullish volume days. Pattern established.
3. MA breadth stability: ✓ 20-day percentage climbed back to 67.6%, well above our 60% threshold.
4. New highs momentum: ✓ 35 stocks near 52-week highs, nearly double yesterday’s 19.
5. Real estate volatility: XLRE IV fell to 22.6%, down from yesterday’s elevated 29.6%. Concern fading.

A clean sweep. Every item we flagged improved, and improved decisively. That’s not luck, that’s a market finding its footing.

The Volume-Breadth Harmony

Yesterday we noted a divergence: bullish volume despite negative breadth, suggesting large-cap leadership. Today that divergence resolved in the best possible way, breadth caught up to volume. When 67% of stocks advance and 65% of volume flows into advancing names, you have genuine participation. This is what sustainable moves look like.

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What This Means for Your Positioning

If You’re Looking to Buy

The entry window that opened over the past two sessions is beginning to close. With breadth back above 2.0 and momentum rebuilding, the “buy the dip” opportunity has largely passed. That said, pullbacks within an uptrend are normal, and today’s strong reading suggests the next dip should find buyers quickly.

Focus on sectors that lagged the last few days but joined today’s rally. They may have room to run. With volatility still suppressed, defined-risk bullish strategies remain cost-effective.

If You’re Already Long

Today validated patience. Those who held through Monday and Tuesday’s chop are being rewarded. The technical picture has strengthened: breadth positive, volume confirming, VIX falling, new highs expanding.

Let winners run. The 67.6% of stocks above their 20-day MA suggests most of the market has wind at its back. Consider trailing stops at the 20-day moving average for individual names, if a stock breaks below on volume, reassess. Otherwise, stay the course.

If You’re on the Sidelines

The wait-for-a-pullback strategy has gotten more complicated. Today’s breadth surge suggests any meaningful pullback may be shallower than hoped. The risk of chasing has risen, but so has the risk of missing the move entirely.

If you must get in, do it systematically. Scale into positions over multiple days rather than going all-in on one session. The market just proved it can rally hard when it wants to, make sure you have some exposure before the next surge.

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The Sector View

The sector volatility picture has shifted notably. Here’s what stands out:

Tech (XLK) saw its implied volatility spike to 30.6%, up from yesterday’s 24.5%. That’s 33% above its historical 23% average. Some of this could be earnings positioning or options activity around individual mega-caps. Worth monitoring, but not alarming given the sector’s tendency for episodic volatility.

Industrials (XLI) continue to show elevated IV at 45.5%, a whopping 139% above its 19% historical average. This has been persistent, suggesting traders see event risk or economic sensitivity in the space.

Consumer Discretionary (XLY) IV jumped to 40.1%, fully double its 20% historical norm. Tesla and Amazon activity likely contribute, but it’s notable regardless.

Communications (XLC) sits at 37.9% IV, 58% above average, signaling nervousness around media and tech-adjacent names.

On the calmer end, Financials (XLF) at 14.8% IV (29% below average) and Energy (XLE) at 20.8% IV (26% below average) suggest confidence in traditional sectors. See all sector performance →

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What to Watch Tomorrow

1. Follow-through: Can breadth stay positive? Even a modest 1.2-1.5 A/D ratio would confirm today wasn’t a one-day wonder.
2. Volume sustainability: Three consecutive bullish volume days would cement the turnaround narrative.
3. New highs expansion: Can we push toward 40+ stocks near 52-week highs?
4. Tech volatility: Does XLK’s elevated IV resolve to the downside (bullish) or higher (caution)?
5. VIX drift: A continued slide toward the mid-15s would confirm complacency.

Today was the confirmation day. Tomorrow tells us whether this is the start of a December rally or an isolated burst of strength.

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The Bottom Line

Day 3 of December delivered everything we asked for and more. The two-thirds participation rate, 35-to-1 high-low ratio, and volume conviction combine into one of the cleanest bullish breadth readings we’ve seen this quarter.

The early December wobble now looks definitively like consolidation rather than distribution. Sellers probed, found limited supply, and gave way to buyers. This is how bull markets behave, they scare the nervous money out, then resume their march higher.

We’re not out of the woods entirely. Elevated IV in Tech, Industrials, and Consumer Discretionary suggests some sectors remain twitchy. And markets rarely move in straight lines. But the weight of evidence has shifted decisively bullish.

When breadth, volume, volatility, and new highs all align, you listen. Today they spoke loudly.

The December rally appears back on track.

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