Trading Update: Monday December 22, 2025
E-mini end of day video review
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Summary of today’s S&P E-mini price action
- Yesterday the daily chart formed a strong bull breakout bar, closing on its high and above the prior four days. This increased the probability of continued buying and at least a second leg up.
- The bulls want to signal strong intent at the top of the daily trading range to get the year-end retest of the all-time high and a breakout above. While Friday was good for the bulls, the context still carries risk because the market is testing prior resistance at the range highs around 12/15 and 10/29, and follow-through often needs to test and retest before a sustained breakout can develop.
- Because of this, the risk for traders is that the market continues to behave like a trading range at resistance, where early bull strength leads to profit-taking and failed breakouts rather than a clean trend.
- On the open, the E-mini gapped up, but the early rally stalled and formed a micro double top. This increased the probability that the gap would not become a trend-from-the-open bull day and that the market would instead form two-sided price action.
- The early selling then developed into a wedge-bottom pullback to the EMA, which increased the probability of buyers below and a reversal up. The bulls reversed the selloff and the market transitioned into a tight trading-range bull flag.
- The bulls then got a wedge-flag breakout (B15) with follow-through (B16). This improved the odds of a test of the day’s highs and a push into the upper portion of the developing range.
- However, the rally into the highs formed a wedge/ nested wedge, and a breakout of the trading range and bears saw this as their opportunity to sell and formed a tight bear channel back into the range – the first breakout of the tight bear channel sold at the EMA into the second leg down for bears and a test of the opening range double top bull breakout point.
- The bear breakout of the double bottom bear flag was weak as it approached support and this increased the probability that bulls would be waiting to reverse at the trading range low and decreased the probability of a bear trend continuing. The tight bear channel was a strong leg in a trading range.
- The late-day rally became a tight bull channel back into the upper portion of the range. However, the market continued to print small reversals (micro double tops and micro double bottoms) and evolved into an endless pullback trading range for the rest of the day.
- Overall, today functioned like a trading-range day at resistance: bulls had the higher timeframe tailwind and produced a credible breakout attempt, but the failed breakout at the highs triggered a selloff that forced a rotation down before the late recovery above the EMA.
- Bull scenario for tomorrow: If the market gets bull follow-through early (strong bull bars, little overlap, holding above the midpoint of Monday’s range/EMA), odds favor a successful break above Monday’s high and a measured-move attempt up toward the ATH magnet and above.
- Bear scenario for tomorrow: If the market opens with weak follow-through (overlapping bars, failure to hold above the midpoint, or another reversal down from the prior highs), the odds favor another failed breakout and rotation back toward the lower half of Monday’s range, with bears aiming for a test of Monday’s low and a deeper pullback toward Friday’s close and towards the magnet of the apex of the expanding triangle on the daily chart 12/17 high.
Jed created the SP500 E-mini chart – Richard travelling.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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Charts use Pacific Time
When times are mentioned, it is USA Pacific Time. The E-mini day session charts begin at 6:30 am PT and end at 1:15 pm PT which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.
