Black Swan Party

Krampus Takes Control: Santa Claus Rally Faces Post-Holiday Volatility

After promising gains on Christmas Eve, markets opened with a steep sell-off on Monday, fueled by risk-off sentiment and a 20% VIX spike. While concerns loom, the U.S. economy remains robust with projected double-digit earnings growth in 2025. Despite today’s volatility, seasonal tailwinds and historical data still support the possibility of a Santa Claus rally to close out the year.

Economic Strength Meets VIX Spike, Buy-the-Dip?

Friday opened with a dip in the markets, but the week is still on track to close positively, fueled by the anticipated Santa Claus rally. Historical data strongly supports continued gains, with seasonal tailwinds and robust U.S. economic fundamentals paving the way.

Consumer Confidence and Year-End Market Opportunities

Last week, markets faced mixed signals as consumer confidence disappointed, adding bearish sentiment to an already volatile environment. However, bullish undercurrents persist, with the U.S. economy growing over 3%, supported by resilient corporate earnings and a post-pandemic recovery.

Catalysts and Seasonal Tailwinds This December

The speed of price movement, especially around critical events like earnings reports and Federal Reserve meetings, often dictates market outcomes. Recent examples include Broadcom’s explosive AI-driven growth post-earnings, contrasting with Adobe’s guidance stumble. As earnings season winds down, macroeconomic and geopolitical factors come into focus, with a likely Federal Reserve rate cut already priced into markets.

December Markets: CPI, Fed, and the Road Ahead

As we approach a pivotal week in the financial markets, all eyes are on key catalysts that could shape the trajectory of the economy and markets heading into 2025. With the upcoming CPI report and a critical Fed decision, volatility is in the air. Investors are bracing for potential surprises, while geopolitical tensions add another layer of complexity.

The VIX: Calm Before the Storm or a Prelude to Stability?

As we approach the end of 2024, the CBOE Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” is painting a picture of calm. Recently, the VIX fell below 14, a level that suggests a market relatively free of anxiety as we head into the holiday season. But what does this mean for investors, and should we brace for a shift in sentiment as we move into 2025?

Volatility Declines Despite Trump Tariff Threats

The Middle East Heating Up: Geopolitical VIX Spike Trade

Trade Updates: Election Volatility, Seasonal Trends, and What’s Next

Election volatility delivered gains, and our strategy to short the VIX on Election Day paid off with a 210% return in just a few sessions. Our analysis predicted an implied volatility crush, tapping into an 80% historical likelihood, and we positioned deep out-of-the-money for maximum returns. We’ve also scored wins across several other trade ideas, reinforcing our approach of leveraging calculated, high-reward opportunities. As we move forward, our portfolio includes tactical plays in high-potential sectors with a focus on consistent, data-driven trades.

Election Volatility Update

Election day brings high stakes and market uncertainty. We’re prepared with a multi-stage approach focused on volatility. Historical data indicates a likely post-election volatility crush, barring unprecedented events. Our positions are designed to capitalize on these trends, with trades balancing risk and opportunity to navigate this pivotal moment in the market.