My Market Thesis: Why I’m Bullish and Running Covered Calls on My Small Account As 2025 wraps up, I’m solidly bullish heading into 2026, and with my smaller account, my favorite strategy hands-down is selling covered calls on stocks I own outright. It’s the perfect mix of income generation, downside protection, and staying true to my long-term upside conviction—especially after the lessons I learned this year turning a $2,600 loss into +$1,707 in gains. Here’s why I’m so confident in this thesis right now, broken down by macro, technicals, and sentiment: Macro Backdrop: The Economy Is Still Roaring Everything points to continued growth without a hard crash. US GDP crushed it with a 4.3% annualized print in Q3, driven by strong consumer spending, exports, and massive AI-related capex. Unemployment claims remain low, corporate buybacks are on pace for a record $1 trillion this year, and the Fed is cutting rates with more easing baked in for 2026. Inflation is cooling without killing demand—this is classic soft-landing fuel. Analysts are calling for the S&P 500 to hit 7,400+ by the end of next year. To me, that screams “stay invested and collect premiums along the way.” Technical Picture: Clean Uptrend, No Signs of Reversal The S&P 500 is making fresh all-time highs as I write this (hovering around 6,930–6,940 on December 26). We’ve stayed in a beautiful ascending channel all year, respecting the 50-day moving average (currently ~6,560) as support and punching through every resistance level like 6,900. Higher highs, higher lows, strong trend strength on ADX—classic bull market behavior. Key support is down at 6,800–6,900; as long as we hold there, the path of least resistance is up. I see us tagging 6,958–7,000 soon if this Santa Rally keeps grinding. My prediction is that it will close tiday at 6,972. Market Sentiment: Optimistic but Not Euphoric Holiday trading is light volume but steady green—people are chasing the year-end melt-up. Bullish sentiment is elevated but not at extreme greed levels yet. AI remains the big narrative driver, we’re seeing healthy rotation into cyclicals and healthcare, and consumer confidence is solid enough to support earnings growth. No major fear spikes, just calm confidence with Fed dovishness in the background. Why Covered Calls Fit My Small Account Perfectly I don’t have huge capital to swing big directional bets or play naked options, so covered calls are my sweet spot: • I buy (or hold) 100 shares of quality stocks/ETFs I want long-term anyway. • I sell out-of-the-money calls and collect juicy premiums—often 1–3% per month. • That income gives me immediate yield while I wait for the bull market to keep running. • The premium acts as a cushion if the stock dips, and I still keep the shares if it doesn’t blast past my strike. It caps my upside on moonshots (which is fine—I’m not trying to get rich on one trade), but in this grind-higher environment, I get paid repeatedly to hold winners. It also forces discipline—aligning perfectly with the stop-loss and trend-following habits I built this year thanks to Moomoo’s education tools. Bottom line: I’m loving this setup. The macro tailwinds are strong, technicals are clean, sentiment is supportive, and covered calls let me compound steadily without over-leveraging my account. Here’s to fat premiums and green charts in 2026—let’s keep the momentum rolling!
As 2025 wraps up, I’m solidly bullish heading into 2026, and with my smaller account, my favorite strategy hands-down is selling covered calls on stocks I own outright. It’s the perfect mix of income generation, downside protection, and staying true to my long-term upside conviction—especially after the lessons I learned this year turning a $2,600 loss into +$1,707 in gains.
Here’s why I’m so confident in this thesis right now, broken down by macro, technicals, and sentiment:
Macro Backdrop: The Economy Is Still Roaring
Everything points to continued growth without a hard crash. US GDP crushed it with a 4.3% annualized print in Q3, driven by strong consumer spending, exports, and massive AI-related capex. Unemployment claims remain low, corporate buybacks are on pace for a record $1 trillion this year, and the Fed is cutting rates with more easing baked in for 2026. Inflation is cooling without killing demand—this is classic soft-landing fuel. Analysts are calling for the S&P 500 to hit 7,400+ by the end of next year. To me, that screams “stay invested and collect premiums along the way.”
Technical Picture: Clean Uptrend, No Signs of Reversal
The S&P 500 is making fresh all-time highs as I write this (hovering around 6,930–6,940 on December 26). We’ve stayed in a beautiful ascending channel all year, respecting the 50-day moving average (currently ~6,560) as support and punching through every resistance level like 6,900. Higher highs, higher lows, strong trend strength on ADX—classic bull market behavior. Key support is down at 6,800–6,900; as long as we hold there, the path of least resistance is up. I see us tagging 6,958–7,000 soon if this Santa Rally keeps grinding. My prediction is that it will close tiday at 6,972.
Market Sentiment: Optimistic but Not Euphoric
Holiday trading is light volume but steady green—people are chasing the year-end melt-up. Bullish sentiment is elevated but not at extreme greed levels yet. AI remains the big narrative driver, we’re seeing healthy rotation into cyclicals and healthcare, and consumer confidence is solid enough to support earnings growth. No major fear spikes, just calm confidence with Fed dovishness in the background.
Why Covered Calls Fit My Small Account Perfectly
I don’t have huge capital to swing big directional bets or play naked options, so covered calls are my sweet spot:
• I buy (or hold) 100 shares of quality stocks/ETFs I want long-term anyway.
• I sell out-of-the-money calls and collect juicy premiums—often 1–3% per month.
• That income gives me immediate yield while I wait for the bull market to keep running.
• The premium acts as a cushion if the stock dips, and I still keep the shares if it doesn’t blast past my strike.
It caps my upside on moonshots (which is fine—I’m not trying to get rich on one trade), but in this grind-higher environment, I get paid repeatedly to hold winners. It also forces discipline—aligning perfectly with the stop-loss and trend-following habits I built this year thanks to Moomoo’s education tools.
Bottom line: I’m loving this setup. The macro tailwinds are strong, technicals are clean, sentiment is supportive, and covered calls let me compound steadily without over-leveraging my account. Here’s to fat premiums and green charts in 2026—let’s keep the momentum rolling!