Market Pulse: Monday, December 15, 2025

Buyers returned on Monday after Friday’s pullback, with the advance-decline ratio coming in at 1.48. While more modest than Thursday’s 2.80, the positive reading confirms that Friday’s selling was profit-taking rather than the start of something worse.

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Market Breadth: Buyers Return

Metric	Today (Dec 15)	Friday (Dec 12)	Thursday (Dec 11)
Advance/Decline Ratio	1.48	0.79	2.80
Advances	174	221	358
Declines	118	280	128
Advancing Volume	35.1%	42.4%	53.7%
Stocks Near 52-Week Highs	22	14	51
Stocks Near 52-Week Lows	1	4	4

Data Note: December 12 breadth calculations are based on approximately 378 of 503 S&P 500 stocks due to incomplete data from our provider (Yahoo Finance). This affects the Friday comparison figures but does not impact Monday’s reading or the directional analysis.

What the Numbers Say

The A/D ratio of 1.48 answers Friday’s key question: Was the pullback a one-day event or the start of something larger? The market says one-day event. With 174 stocks advancing versus 118 declining, buyers returned, though participation was more modest than Thursday’s strong showing.

Advancing volume came in at 35.1%, slightly below Friday’s 42.4% reading. This suggests the bounce, while real, happened on lighter conviction. Buyers are nibbling rather than aggressively accumulating.

The stocks near 52-week highs improved to 22, up from Friday’s 14, while stocks near 52-week lows held at just 1. This indicates almost zero capitulation selling. Markets are not experiencing stress, just digestion.

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VIX and Volatility: Drift Higher Continues

Metric	Today (Dec 15)	Friday (Dec 12)	Thursday (Dec 11)
VIX Level	16.50	15.74	14.85

The VIX continued its slow grind higher, reaching 16.50 on Monday. This marks the third consecutive session of rising volatility, moving from Thursday’s 14.85 through Friday’s 15.74 to today’s reading.

Context matters here. A VIX at 16.50 is still historically low and well within “complacent” territory. The move higher simply returns volatility pricing to more sustainable levels after last week’s post-Fed squeeze drove VIX below 15.

Options markets continue pricing minimal stress:

• SPY IV: 16.99% (normal)
• QQQ IV: 21.93% (normal)
• IWM IV: 16.36% (below average)
• DIA IV: 10.87% (very low)

The sector volatility picture shows Technology (XLK) at 21.5% IV, down from Friday’s elevated 27.2% reading. Financials (XLF) remain extremely calm at 13.8% IV. Materials (XLB) normalized to 23.2% from Friday’s 24.3%.

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Headlines Moving Markets

Several narratives shaped Monday’s trading:

Fed Inflation Clarity: Two Fed officials who rarely agree both stated inflation will not be a problem going forward. This dovish alignment provides cover for the rate cut trajectory and likely contributed to the bounce in risk assets.

Tech Rotation Continues: Broadcom (AVGO) extended its worst three-day slide since 2020, highlighting ongoing profit-taking in AI infrastructure leaders. Meanwhile, Nvidia saw a Wall Street bear double down on his negative call with “high conviction.”

AI Spending Concerns: Oracle’s stock and bonds remain under pressure from AI spending fears, suggesting investors are scrutinizing the sustainability of AI-related capex.

EV Reality Check: Ford announced major EV plan changes with a $19.5 billion hit, reflecting the ongoing adjustment in electric vehicle expectations.

The common thread: markets are rotating, not fleeing. Money leaving high-flying AI names is finding homes elsewhere in the market, supporting the positive breadth despite tech weakness.

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Sector Implied Volatility Snapshot

Sector ETF	IV Level	Status vs. Historical
XLK (Tech)	21.54%	Normal (-6% vs avg)
XLV (Healthcare)	14.93%	Low
XLF (Financials)	13.81%	Low (-31% vs avg)
XLI (Industrials)	12.95%	Low
XLY (Consumer Disc)	24.48%	Normal
XLE (Energy)	21.11%	Low (-25% vs avg)
XLB (Materials)	23.18%	Normal
XLU (Utilities)	14.99%	Normal

Technology volatility normalized significantly from Friday’s 27.2% spike to 21.5%, suggesting the sector stress is easing. Financials remain remarkably calm at 13.8%, over 30% below historical averages, which reflects confidence in the Fed’s path.

The lack of volatility spikes across sectors during Friday’s pullback and Monday’s bounce indicates orderly market conditions. This is profit-taking and rebalancing, not panic.

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Weekly Perspective: Fed Week Adjustment

Date	A/D Ratio	Advances	Declines	VIX	Near 52w High	Near 52w Low
Dec 11	2.80	358	128	14.85	51	4
Dec 12	0.79*	221	280	15.74	14	4
Dec 15	1.48	174	118	16.50	22	1

*Dec 12 breadth based on ~75% of S&P 500 stocks due to data provider gap.

The week pattern is becoming clear: post-Fed rally, profit-taking, recovery attempt. The A/D ratio bounced to 1.48 but has not fully reclaimed Thursday’s 2.80 level. New highs improved to 22 from Friday’s 14, showing some broadening.

The declining near 52-week lows count from 4 to 1 is quietly bullish. When new lows disappear during a pullback, it indicates the weak hands have already exited and there is minimal distressed selling left.

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What This Means for You

If You Bought the Dip Friday

Your timing looks good so far. The bounce materialized, and breadth confirmed buyers returned. Consider:

• Letting winners work: If positions are green, the trend is reasserting itself
• Watching volume: The light advancing volume suggests more upside work is needed
• Managing expectations: A full return to Thursday’s breadth levels may take time

If You’re Still Holding from Wednesday

You weathered Friday’s test successfully. The pullback stayed shallow, and Monday’s recovery validates your patience. Key watchpoints:

• New highs recovery: 14 remains low, watch for improvement toward 30+
• VIX trajectory: Staying below 18 keeps conditions favorable
• Sector rotation: Tech weakness creating opportunities elsewhere

If You’re on the Sidelines

The pullback-and-bounce pattern played out quickly. If you missed Friday’s dip, you now face a market that has recovered most of the lost ground. Options:

• Wait for the next dip: Pullbacks in uptrends tend to repeat
• Scale in slowly: Partial positions allow you to participate while waiting for better entries
• Focus on laggards: Stocks that did not fully participate in the bounce may offer catch-up opportunities

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What to Watch Tuesday

1. Volume confirmation: Does advancing volume improve from today’s 19.6%? Higher volume would validate the bounce.
2. New highs expansion: Can the 14 reading begin climbing? 20+ would be encouraging.
3. Tech stabilization: Does AVGO and the broader AI trade find footing?
4. VIX direction: Does it continue drifting toward 17-18, or reverse back toward 16?
5. Fed communication: Any additional commentary on the inflation outlook or rate path.

With the Fed meeting behind us and the year-end holiday period approaching, markets enter a seasonally favorable window. Light volume conditions can amplify moves in either direction.

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The Bottom Line

Monday delivered a modest bounce after Friday’s pullback. The A/D ratio of 1.48 confirms buyers returned, though with less conviction than Thursday’s strong 2.80 reading. With 174 advances versus 118 declines and near 52-week lows at just 1, market internals show no signs of stress.

The VIX drifted higher to 16.50, continuing its normalization from last week’s overly-compressed sub-15 levels. This is healthy recalibration, not concerning. Sector volatility remains well-behaved across the board.

Advancing volume at 35.1% and improving new highs at 22 suggest orderly buying rather than aggressive accumulation. The market is digesting gains rather than panicking.

For now, the trend remains intact. Friday was a one-day event, and buyers returned Monday. The week ahead will determine whether this bounce has legs or is simply a pause before more digestion.

This analysis is provided for informational purposes only and should not be considered investment advice. Always conduct your own research before making investment decisions.