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Thanksgiving week gave investors a lot to be thankful for.

The S&P 500 dipped below the 50 day moving average last week, but it recovered quickly. This is exactly the type of reaction you want to see in a strong market. As I have noted many times, the longer the index sits below the 50 day, the more caution is required. But this bounce is a very positive signal.

Even though the index fell almost 5 percent during the month, buyers stepped in quickly and regained control. The market finished November positive.

And here is an interesting fact going into December:

When the S&P 500 closes positive for the month despite a drawdown of at least 4.5 percent, the next month is higher 79 percent of the time.

The S&P 500 has now been up every month since April. That is seven straight months in a row. This type of streak does not last forever. It will end at some point.

But…

…looking out this is very positive news for the markets.

Strong markets tend to remain strong longer than people expect. So, while there might be some short-term turbulence, they just don’t die suddenly. It’s hard to kill a bull.

And the market internals are improving steadily too.

Several breadth indicators have turned higher which means the rally is broadening. More stocks are participating, not just a few large names. This is what you want to see in a healthy uptrend. They are not perfect. No indicator is infallible, this is a pretty good track record.

December has historically been one of the best months of the year for equities:

• 46.3 percent of Nasdaq’s annual highs since 1971 happened in December.

• Since 2003, all major US indices made their annual highs in December eleven times.

• Since 1980, the S&P 500 has finished December green more than 70 percent of the time.

However, sometimes the first half of the month can be choppy until the Christmas rally starts in the second half.

Volatility also dropped sharply. The VIX moved from above 26 to below 18 within four days. This is critical because lower volatility often creates a more stable environment especially for risk-on assets.

Another important reminder. If you only listen to headlines, it can feel like the market faces a crash every year. The data tells a different story. Severe bear markets are rare, and the time between them is usually much longer than people think.

Good time to remember this bull market is only about three years old. Also, up 92% is still very low compared with other bull markets.

There is a common belief that only a handful of mega caps drive the entire US market. The numbers do not fully support that view.

The top 10 stocks account for about 40 percent of market cap. That sounds high, but it was 39 percent last year and the market performed well. Compared globally, the United States is actually one of the least concentrated…

The S&P 500 officially closed its most volatile week since April.

It made a bit of unwanted history on Thursday. On Thursday it opened up more than 1.5% and then closed down more than 1.5%. It was only the 4th time ever that the S&P 500 experienced an intraday swing of that magnitude.

And if you look at the times since 1950, there have been only 8 days where the index opened more than 1% higher but still finished red.

One month later the S&P 500 was higher in 6 of the last 7 cases. The last 3 times this happened marked the bottom.

Even Nvidia’s incredible earnings could not stop the pullback.

The numbers were off the charts. No other company on earth is growing at this scale. Jensen said it well: “AI is going everywhere, doing everything, all at once.”

AI is not hype. It is a multi trillion build out. But that does not mean it will go up in a straight line. There have already been several big drawdowns. And there will be many more. Each time the sceptics said the AI bull market was over. Each time they were wrong.

Sometimes it helps to zoom out and look at the long term chart. When you compare this to the dotcom bubble, we’re still only in the third inning. There is still room to run. And the actual big moves happen much later.

Last week the S&P 500 closed below its 50 day moving average for the first time since April 30.

That ended a 198 day uptrend. It was the fifth longest since 1950. This is why trend following matters. It keeps you safe from the worst drawdowns while still catching the big upside with zero guesswork.

So what now.

The most likely outcome is that volatility comes back. The rally since April was almost too smooth. It ran more than 40% without a simple 5% pullback. That is not normal.

We pulled back about 5.8% from the October high. Since the 2009 low we have seen 31 corrections bigger than 5%. Every single one came with scary headlines. Every single one felt like the end of the world. But the world did not end and the market made new highs each time.

Bitcoin has been crushed and is now the worst performing major asset in 2025. It is down about 36% from its all time high and even down for the year. That has never happened before. So either the rest of the market…