U.S. Stock Market Futures: Review and Forecast for the Week of 22-26/12

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The key event that occurred in the outgoing week on the U.S. derivatives market was the rollover of quarterly derivatives: futures and options.

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During futures repositioning, most often no news affects the market, since there is no loaded liquidity. That is exactly what we observed this time. Sometimes the opposite happens: during rollover week, a colossal imbalance forms in one direction. This means only that players are completely unwilling to accept current prices, and at a moment of a thin derivatives market (and rollover is also a thin market), the spot price can easily be shifted.

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Separately, it is worth noting that the PCE (Personal Consumption Expenditures Price Index) data for November were not released. This has happened for the second time in a row: first a shutdown, then something else.

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Some say that the recently published Consumer Price Index (CPI) was overly optimistic for a reason, and because Trump very much needed to publicly show a decline in inflation. The CPI itself showed values not seen since March 2021, although the market expected an increase, as the Fed was saying just last week.

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Meanwhile, the market feels very calm: the VIX fear indicator is near its lowest levels of 2025, indices are knocking on historic ceilings, and investment banks expect growth to continue next year.

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Fresh liquidity was confidently loaded all week in the 6820-6890 range. The range has long been known: players have been working here for the last three weeks, and they first entered it not so long ago, in late October. All in all, the range is clear.

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It very much looks like buyers next week, maybe even starting Monday, will try to move above local resistance in the 6910-6945 range. The price action on December 17 and 18 very much resembles a V-shaped reversal, which means even 7000 points will not be an obstacle for buyers.

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Now let us look at the ES futures quote only in RTH. I will say again that we should remember the rollover and contango in futures.

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On Monday, America loaded some liquidity in the 6879-6889 range, which on Tuesday was used as a resistance zone and a starting point for shorts. On Wednesday, they distributed into shorts, gaining liquidity in the 6847-6857 range after a test from below of 6863-6870.

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In essence, they traded down to last week’s closing point and reached the target price levels discussed in the previous review. Quotes were stopped on Wednesday, December 17, in the 6778-6812 range. Micro-levels can be identified there, but for now I do not see much point in that.

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What are the plans for the week?

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The main scenario is an exit into buy. It is possible both from the week’s closing point and through a test near 6850 with the main liquidity built in the 6870-6890 range. The reasons are simple: there are all signs of a V-shaped reversal forming. And this means we may see 6930, and then 7000 may be shown by Catholic Christmas or immediately after it.

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Entry search: if they play out a nice buy model, then on Monday they should show expansion, on Tuesday test it, and on Wednesday, before the day off, fly north. A classic of the genre.

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I am not considering an alternative to the main scenario yet. If they remain in the balance of the past week, then I would not look for them below 6820. And if they end up there by Tuesday, for example, then buys can be sought inside the balance.

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In the outgoing week, the NQ futures looked livelier than ES, but it had also looked worse the week before last, so we will consider that players are making up the lag here.

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All week, players loaded liquidity in a wide 25190-25400 range. On Wednesday they finished off the selling / arranged a money takeout from buyers by touching 24900. We had already discussed this round number over several reviews.

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On Friday, buyers pushed the quote toward 25530-25590. This is right under the last sales of the previous contract.

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What are the plans for the coming week?

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They can trade around 25350-25400 on Monday-Tuesday (the point of control and the upper boundary of the current week's core). They can do something with tails and rush toward 25900 on Monday. If they do that, then we wait for reverse trading on Tuesday and buy on Wednesday, counting on a holiday impulse.

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I do not expect any southern strikes, since positive sentiment reigns in the markets.

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This instrument showed a somewhat different model of volume accumulation in the outgoing week. If the previous instruments grew briskly on Thursday and Friday, here on Friday they did not even manage Thursday's highs.

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Is everything bad? No, they simply closed the previous week at historical highs, and there is nothing surprising in the fact that the guys are buying (and for now they are buying), despite contango, at least in the 48230-48450 range, where certain sales were loaded on November 11-12.

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When will it be possible to say that the instrument is ready for expansion to the north?

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Ironclad readiness is a breakout with consolidation above the 48750-48840 range. This is Monday's shorts zone, and buyers must overcome it and throw liquidity into the push.

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I would expect a breakout of the 48540-48580 range as early as Monday, perhaps through a test of 48350 and an approach to the 48750-48840 range. They should be breaking through it already on Tuesday, unless they want to stand under this money or inside it for a day and gather more strength for the market upward. And continue the growth on Wednesday.

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The coming week will be short.

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The markets will close at noon on Wednesday, December 24. There will be no trading on Thursday - Christmas. More precisely, it will begin after clearing, at 17:00 CT, which is after midnight for us. Friday will be a regular business day.

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Until Wednesday I expect growth. On Friday they may continue the move, or they may go into Wednesday's trading range. The market is still thin there, which means there is both room and reason to return.

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