Wish all of us Merry Xmas and Happy New Year! I wish myself specifically can do better in 2026, especially being consistent and avoid losing a huge amount of accumulated profits for days in just a or several trades. Be patient, non-emotional and decisive.

Weekly Chart

The market needs a 'reason' to act based on 'price action.' As mentioned last week, the price moved into nested wedges, and the weekly bar closed at its low, 0.75 points (3 ticks) below the previous week's open. Last week, due to the CPI and FOMC announcements, the market dropped sharply. Did this external information really matter? Yes and no. If the information had been positive, the market likely would not have reacted so bearishly. However, based on technical analysis, there was still a high probability that the market would decline for consolidation.

Looking back at the current weekly chart, it is clear that there was a large bearish body. It attempted to reverse, reached less than a 50% pullback (PB), but closed below that level. There are a few key points to note:

  1. Bearish Momentum: The bearish move was strong, forming a solid bearish weekly bar that closed below the 50% pullback level. It nearly tested the support zone established when Trump won the election (leaving a small gap between 5844.75 and 5865.75).

  2. Bullish Effort: The bullish side was also strong. After the market's sharp decline, bulls pushed the price significantly above the 50% level of the bearish body. And the Most important thing is the market closed at 6000.5, which is at least above 6000.

When the market shows strong bearish and bullish activity like this, it is clearly in a trading range (TR) and transitioning into either a bull trend or a bear trend. The probability of each scenario is roughly 50/50.

Hourly Chart

There is still a gap left; however, the chance of filling the gap within a week, especially after such a significant bearish collapse, is not high. Hourly bars show a clear double-bottom (DB) pattern with a lower-low major trend reversal, accompanied by a strong bull bar. This is why there was a high probability of consecutive bull bars forming. The retracement observed in the last couple of hours is likely not due to bears entering to short again but rather bulls taking profits.

Several factors are significant:

  1. 6000 Level: A critical psychological and technical level.

  2. Christmas Timing: The holiday period often brings lower volatility and a shift in market behavior.

  3. Transitioning from Bullish to Bearish: This process takes time.

These factors suggest that the upcoming Christmas week will likely exhibit trading range (TR) behavior or a bull trend within a TR. The probability of the market moving significantly lower is less than 50%.

Support Levels:

  • 5960 (Breakout and reversal starting point)

  • 5862 (Gap fill)

  • 5782 (Worst-case scenario)

Resistance Levels:

  • 6114 (Gap fill)

  • 6150 (Wedge top)