Wednesday Momentum Check — November 26, 2025

The tape is behaving exactly like a pre–Thanksgiving session: liquidity is thinning out, leadership is narrow, and most traders are more worried about travel than taking fresh risk. But “quiet” doesn’t mean meaningless — today’s flows are telling you where money is comfortable hiding into month-end and where patience is running out.

1. Tape: Low Liquidity, Clear Rotation

Volumes are running well below 20-day averages across the majors, but the pattern beneath the surface is consistent:

• Mega-cap tech: trading mixed, with buyers showing up on shallow dips but no appetite to chase breakouts into a holiday.
• Defensives: staples, utilities, and healthcare are quietly outperforming, reflecting a “play it safe into month-end” mindset.
• Cyclicals: industrials and financials are chopping sideways, tethered to the 10-year yield and year-end positioning rather than new information.

The result is a market that feels stable on the surface but tired underneath — rallies stall quickly, and dips get bought, but nobody is pushing aggressively in either direction.

2. Volatility & Positioning: Comfortably Dull

Implied volatility remains subdued, and there’s little evidence of urgent hedging:

• Index vol is pricing a calm, range-bound tape through the holiday window.
• Single-name skew is flatter, suggesting less demand for crash protection and more interest in yield-selling strategies.
• Dealer positioning still argues for a “gravity toward the middle” setup — intraday swings are being faded rather than extended.

This is classic holiday behavior: the path of least resistance is sideways to slightly up, unless an unexpected macro shock hits the tape.

3. What’s Actually Moving: Pockets of Momentum

Even in a sleepy tape, there are a few clear themes:

• AI & semis: still the cleanest upside momentum, with traders willing to add selectively on red days.
• Energy: stabilizing after recent weakness, but flows are tentative — the market wants confirmation that crude has found a floor.
• Small caps: fading after the latest bounce, as higher real yields and tighter financial conditions limit enthusiasm.

These pockets matter because they show you where risk appetite still exists — and where traders will likely return once liquidity normalizes after the holiday.

4. Into the Holiday: How to Read the Next Few Sessions

The next 48 hours are less about “new information” and more about how the market reacts to the macro story it already knows:

• Watch whether dip-buying in leaders (AI, semis, quality growth) remains orderly.
• Track if defensives keep outperforming — that would confirm a slow rotation toward lower-beta exposure into year-end.
• Keep an eye on the 10-year yield — a move back toward recent highs would tighten financial conditions and pressure cyclicals again.

5. Bottom Line

This is still a bull market with a tired engine: leadership is concentrated, liquidity is thin, and nobody wants to blow up a year’s worth of P&L the day before a holiday. For active traders, the playbook is simple — respect the ranges, don’t overinterpret holiday tape, and use any overshoots as information about where capital wants to be positioned once full liquidity returns.

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