As we head into the final stretch of 2025, markets feel restless. Volatility has picked up, rallies fade faster, and every headline seems to question whether the Santa Rally still exists.
But stepping back, this does not feel like panic. It feels like transition.
After a strong year driven by rate cuts, AI momentum, and returning liquidity, markets are no longer pricing upside blindly. Instead, they are digesting gains, resetting positions, and waiting for clarity. That is why December has been choppy rather than directional.
Several forces are colliding at once:
Thin year-end liquidity amplifying moves
Heavy options positioning influencing daily price action
Global macro uncertainty lingering, especially around policy shifts
This creates an environment where price behaviour matters more than narratives.
Into year-end, my base case is not a dramatic melt-up or a breakdown. It is a range-bound, volatile market where patience is rewarded and over-trading is punished. Rallies can still happen, but they are likely selective and fragile rather than broad and euphoric.
My Market Playbook: Dec to Jan
Controlled Grind Higher (40%)
Markets stabilise after volatility, drifting higher into year-end without fireworks. Best suited for selective exposure and reduced leverage.
Year-End Shakeout (35%)
Thin liquidity and positioning trigger short-term drawdowns. Uncomfortable, but constructive for January resets.
Late Santa Surprise (25%)
A positioning squeeze lifts markets briefly. Upside exists, but sustainability is questionable.
What stood out most in 2025 was not price, but behaviour. Flexibility beat conviction. Risk management beat perfect entries. Exits mattered more than opinions.
That mindset shapes how I am approaching year-end. I am not chasing headlines or forcing trades. I am observing, trimming where needed, and preparing for clearer opportunities as liquidity returns in January.
Sometimes the most profitable move is not acting, but being ready.
I'm not a financial advisor. Trade wisely, Comrades!
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