After the Storm: Thanksgiving Week at the Market Crossroads

Moomoo Insights joined discussion · Nov 24, 2025 03:19

As we step into the Thanksgiving-shortened week, U.S. equities are grappling with persistent turbulence following a volatile close to the prior week. The Nasdaq 100 dropped 3.07%, while the S&P 500 shed 1.95%, highlighted by a dramatic 4% intraday reversal on Thursday that underscored peak volatility. Although underlying fundamentals appear stable, sentiment-driven swings, CTA deleveraging, and fluctuating rate expectations continue to shape short-term dynamics.

The pivotal question for the week ahead: Can the S&P 500 maintain its footing above the 100-day moving average and shift toward a consolidation phase? At the macro level, three primary risks loom—AI valuation bubble concerns, Federal Reserve uncertainty tied to labor market signals and rate-cut timing, and potential contagion from cryptocurrencies, particularly $Bitcoin (BTC.CC)$'s recent technical breakdown. These factors are exacerbated by ongoing CTA deleveraging, which thins liquidity and amplifies intraday movements. Nevertheless, early indications of easing forced selling suggest the market may be nearing a tactical stabilization opportunity.

Market Outlook

Short-Term View: Sentiment Over Fundamentals

Market fluctuations in the past two weeks have been largely emotion-fueled rather than rooted in deteriorating economic data. Sharp oscillations in December rate-cut probabilities—from below 40% to above 60% after New York Fed President John Williams' speech on November 21—illustrate the market's acute sensitivity to Fed rhetoric. In his address, titled "Navigating Unpredictable Terrain," Williams affirmed that a December cut remains on the table, aiding a late-week equity rebound.

After the Storm: Thanksgiving Week at the Market Crossroads

This week, key macro releases include September core PCE inflation and durable goods orders. While these indicators are not expected to exert a strong direct impact on fundamentals, they could influence perceptions of Fed policy and heighten volatility, especially amid holiday-thinned liquidity. Thanksgiving closures on Thursday and a half-day session on Friday typically compress index-level swings but widen dispersion among individual stocks, setting the stage for calmer broad-market action interspersed with sharp single-name moves.

Technical Setup: Focus on the 100-Day Moving Average

From a technical standpoint, the S&P 500 has breached its short-term trend line, positioning the 100-day moving average as the critical battleground. Stabilizing here could facilitate a transition to range-bound trading, whereas a failure might lead to a deeper probe toward the weekly chart's support around 6,200—though this remains a low-probability outcome at present.

Adding to the case for potential mean reversion: The index has now posted three consecutive weekly declines, a streak that historically reduces the likelihood of a fourth, often heralding short-term rebounds or stabilization periods.

Long-Term Outlook: Debating the AI Bubble

Concerns over an AI valuation bubble are intensifying, yet mega-cap tech valuations remain elevated but not untenable relative to robust earnings growth. Crucially, the very fact that markets are openly debating the existence of a bubble indicates we are likely far from its peak stages, providing a buffer for longer-term optimism if short-term pressures subside.

Stocks

Last week's sector rotations revealed vulnerabilities in high-concentration areas, particularly AI-related names. $Alphabet-A (GOOGL.US)$ emerged as a standout performer, rising 8.4% on the back of Berkshire Hathaway's stake disclosure, positive sentiment around Gemini 3.0, and advancements in AI-generated visual applications. In contrast, most other mega-caps faltered: $Oracle (ORCL.US)$, $Palantir (PLTR.US)$, $Advanced Micro Devices (AMD.US)$ , and $Micron Technology (MU.US)$ each declined over 10%, reflecting broader AI overvaluation fears and rising credit default swap prices tied to debt sustainability.

Healthcare sectors bucked the trend with modest gains, while $Quantum Computing (QUBT.US)$ names retreated sharply by more than 10%. Consumer stocks exhibited a K-shaped pattern, highlighting a shift toward value-oriented spending amid uneven retail trends.

This week's earnings calendar is lighter, with $Alibaba (BABA.US)$ drawing focus ahead of its Tuesday pre-market report. Expectations point to a year-over-year profit decline, shifting attention to the pace of monetization in its retail, AI, and cloud divisions. $Pony AI (PONY.US)$ 's results may reveal expanded losses, potentially pressuring sentiment in the autonomous driving space.

Options

Last week's downturn elevated index volatility, pushing major benchmarks below their 50-day moving averages. The equity put/call ratio's 10-day moving average has risen steadily since early November, approaching 0.7—a level reminiscent of April's peaks. This uptick reflects heightened demand for downside protection, which has historically coincided with increased rebound probabilities.

Additionally, Bloomberg data indicates a surge in zero-day to one-day-to-expiry (0DTE/1DTE) option selling, where investors collect premiums amid choppy conditions. Such activity contributes to reduced trend persistence, as dealer hedging flows help constrain price ranges and fuel abrupt intraday reversals. Meanwhile, Deutsche Bank characterizes the recent sell-off as a momentum reset, which could pave the way for renewed call volume if stability emerges.

Crypto

The cryptocurrency sector mirrored equity declines last week, plunging into extreme fear territory. $Bitcoin (BTC.CC)$ and $Ethereum (ETH.CC)$ weakened sharply due to hawkish macro data eroding December rate-cut hopes, substantial U.S. spot BTC ETF outflows totaling $904 million in a single day, and BTC's breach of key supports down to $80,500. This tightened crypto's correlation with stocks, amplifying its role as a high-beta asset under stress.

Shifting to cautious hope this week, sentiment may hinge on macro developments. Dovish surprises could trigger relief rallies, while persistent hawkishness risks retesting lows. Crypto-specific factors include the imminent XRP ETF debut, new filings for DOGE and LINK, and $Coinbase (COIN.US)$ Launchpad's launch. The Monad Layer1 blockchain and MON token rollout on November 24, with a 50.6% initial lock-up, may introduce early volatility despite strong fundraising. Ongoing discussions around $Strategy (MSTR.US)$ 's potential removal from stock indices add a bearish overhang. In general, BTC's rebound strength remains a key gauge for broader contagion risks, particularly in a liquidity-constrained environment.

Conclusion: Navigating the Path Ahead

This holiday-shortened week presents a delicate balance: persistent risks (AI, Fed, crypto) against nascent signs of seller exhaustion. While volatility remains high, a window for tactical stabilization may emerge.

Key signals to track:

– S&P 500's defense of the 100-day moving average.

– Market sensitivity to core PCE/durable goods data for Fed cues.

– Confirmation of broader buying beyond mega-caps.

– Crypto's ability to stabilize and avoid contagion.

With easing forced selling and elevated put/call ratios, a low-volume stabilization or modest rebound is plausible, absent negative macro surprises. Vigilance and disciplined risk management are paramount.

Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more