2025.12.5 Macroeconomic Market Analysis

Technical Aspects:

No matter how the market rebounds, the likelihood is that it is an escape opportunity! A high short strategy is currently the most reasonable plan! The extreme pressure range is between 97000 and 102000, and the weekly level has already entered a downward trend. Currently, it is a super rebound at the weekly level, with the monthly MACD showing a high dead cross and the daily level also trending downward. In summary, it will not be a rapid decline, so patience is required to wait for opportunities.

Macroeconomic Aspects:

There are three very important time points in December, and the market in the next three weeks will revolve around these time points. Here is a summary for everyone;

First: December 11, the Federal Reserve will announce its interest rate decision. Previously, it was expected that there would be no rate cut in December, but now the probability of a rate cut is very high, at 87%;

Second: December 19, the Bank of Japan will announce its interest rate decision. Previously, the market expected that the Bank of Japan would not raise interest rates in December, but this Monday, the Governor of the Bank of Japan's public speech hinted that there is a high probability of a rate hike on the 19th;

Third: December 26, the massive year-end options settlement for the market, which can be said to be the most important settlement day in the options market. It is both the quarterly settlement time and the last settlement time of the year, so the volume is very large, with a nominal price reaching 23 billion;

The first two are major news items because the decisions of the Federal Reserve to cut rates and the Bank of Japan to raise rates are quite important. However, this time the market expectations for both sides differ from the initial expectations, which increases market uncertainty;

The third is options data. Currently, the biggest pain point for options is 100000, with the maximum peak for PUTs at 84. This indicates that in December, it is very difficult for market prices to break and stabilize above 100000, and the 84 level has institutions providing bearish protection. A few days earlier, when the market fell below 84, it quickly rebounded without bottoming out, which is likely the reason.