EB Daily Market Report - Thursday, December 11, 2025

Tom Bowley - December 11, 2025

Executive Summary

Futures were mixed overnight and bifurcated at the opening bell
Relative strength is clearly being felt in the Dow Jones and small cap Russell 2000
Oracle Corp (ORCL, -10.54%) gapped down significantly after missing its quarterly revenue estimate
Software ($DJUSSW, +0.12%) opened very weak, but has recovered nicely
Technology (XLK, -0.63%) has lagged despite software's recovery
Semiconductors ($DJUSSC, -1.55%) is also well off its lows, but I'm concerned about the group - more on that below
Materials (XLB, +1.96%) and financials (XLF, +1.82%) are sector leaders today
Consumer finance ($DJUSSF, +4.32%) is trying to close above 810 for the first time in history
Cryptocurrencies are weak again, this time led by etherium ($ETHUSD, -5.04%)
Commodities, other that crude oil ($WTIC, -1.11%), are mostly higher; gold ($GOLD, +1.85%) and silver ($SILVER, +4.80%) are both strong
Cruise lines are gaining ground with Royal Caribbean (RCL, +7.85%) and Norwegian Cruise Line (NCLH, +6.68%) leading the S&P 500 to attempt a close above 6900 for the first time ever

Market Outlook

Initial jobless claims came in 5-6% above expectations this morning. Given the negative ADP employment report last week, this is a weekly economic report that we'll want to continue to watch closely. If jobless claims and the unemployment rate turn higher, that has had a history of subsequent selling in U.S. equities. It's way too early to worry about that right now, but it is something I'll be tracking.

The small cap Russell 2000 (IWM, +1.25%) and the Dow Jones ($INDU, +1.35%) are both in all-time record high territory and, if I'm correct about growth stocks struggling for a period of time, we could continue to see more bullish rotation into these two major indices. I've spent much of the past two years discussing what I believed would be outperformance by small caps and we're certainly seeing that now.

Sectors/Industries

I'm growing more concerned about semiconductors ($DJUSSC). I think they'll be fine longer-term, but they've run a LOT since that April low and it would make sense for them to at least pause for a bit, possibly even sell off. Check out this long-term monthly chart and the negative divergence that's formed in the stratosphere on the PPO:

60% moves over 9 months (bottom panel) don't happen often, but history tells us that the DJUSSC can struggle in the period that follows.

Here's another 25-year chart, but this time on a weekly basis:

Note that whenever the group has seen a weekly PPO at its current level or higher, or a 39-week (9 months) rate of change (ROC), significant downside volatility can occur. That worries me as the market has begun to shun some of the large cap growth names, which would include semiconductors like NVDA, AMD, and others.

ChartLists and Trading Strategies

I'm not of the mindset to trade just for the sake of trading. I need to remain cautious, with only high reward to risk setups being considered. I believe that many of our portfolio stocks remain tradable, just make sure that stops are in place in the event that our major indices roll over. As I've indicated above, semiconductors ($DJUSSC), in particular, look quite vulnerable if we do begin a period of falling equity prices.

One way to keep losses to a minimum is to look for stocks that have been trending above the 20-day EMA and are currently testing that key moving average. I ran our 20-day scan from our website against the following 4 ChartLists:

Strong Earnings (SECL)
Strong Future Earnings (SFECL)
Raised Guidance (RGCL)
Strong AD (SADCL)

I also added a filter where the StockCharts Technical Rank (SCTR) score had to be over 90. 19 stocks were returned as follows and in SCTR order:

SNDK, BW, ONDS, IONS, WGS, LAR, LUMN, SEPN, MDGL, ENGN, INTC, FDMT, AUPH, FTCI, DNTH, CSTL, IRON, MOD, TPC

Of these 19 stocks, many have already bounced significantly off their 20-day EMAs. These 6 are still relatively close to their respective 20-day EMAs, where stops can be kept fairly tight: IONS, WGS, SEPN, INTC, DNTH, CSTL

Upcoming Earnings

We are now waiting until Q4 earnings season kicks off in mid-January before publishing our Upcoming Earnings ChartLists and Upcoming Earnings Relative Strength ChartList.

Economic Reports

Initial jobless claims: 236,000 (actual) vs. 223,000 (estimate)

Happy trading!
Tom