The Chart Check - Dec 19, 2025

*** Please see the bottom of this report for important disclaimers and disclosures.***

The Chart Check - 19 Dec 2025 - Bulls vs. Bears, SPX, NDX, and inflation breakeven rates.p Download P • 2.46MB

Bulls vs. Bears, SPX, NDX, and inflation breakeven rates

AAII Bulls vs. Bears: Room to run based on 13- and 52-week moving averages

Our June 9 Charted Market Insights flagged that individual investor sentiment was coming off its biggest contrarian bullish signal since the savings and loan crisis (see chart notes below). The 13-week average and the spread between the 13- and 52-week averages of AAII Bulls vs. AAII Bears have risen since then and continue to confirm the equity market rally into December. The 13-week average just crossed above zero with room to run toward recent overbought levels well into the 20s. The spread between the 13- and 52-week averages crossed above zero in late July to confirm the rally from the April low and also has room to run prior to reaching levels of complacency.

SPX and NDX: No conviction yet for the handles of the developing cup and handles

December price action has been lackluster, but breadth has been solid, and a potential bullish leading indicator, as both the S&P 500 (SPX) and NASDAQ 100 (NDX) trade within potential bullish cup and handle patterns from late October (see recent reports and blog posts). Weekly seasonality shifted bullish this week and remains positive into early 2026 (Dec 18 Straight from the Chart). While breadth and seasonality are encouraging, the developing handles need more conviction if both the SPX and NDX are to complete the cup and handles on a push to new highs. Supports are holding so far, but upside follow-through is required to increase confidence.

SPX needs to reclaim 6795 to increase conviction in its bullish cup and handle

The SPX must reclaim the rising 20-day moving average (center line of the Bollinger Bands) and at 6795 to increase confidence in the developing handle of the bullish cup and handle pattern. The 38.2%, 50.0%, and 61.8% retracements of the rally from the cup low to the handle high at 6757 (undercut), 6712 (nearly tested), and 6667, respectively, offer potential support along with the daily Ichimoku cloud span from the 6740s to the 6640s. The early November low at 6631 offers another support. If supports hold and the SPX completes the cup and handle on a breakout to new highs beyond 6900-6920, it would target 7200-7300.

NDX needs to reclaim 25,223 to increase conviction in its bullish cup and handle

The NDX must reclaim the rising 20-day moving average (center line of the Bollinger Bands) at 25,223 to increase confidence in the handle of its bullish cup and handle pattern. The zone between the 38.2% and 61.8% retracements of the rally from the cup low to the handle high and the daily Ichimoku cloud span provide a support zone from 25,000 to 24,600 (also the early November low). The NDX has tested the low end of this zone. If it continues to hold and the NDX completes the cup and handle on a breakout above gap resistance at 25.762-25,888, it would favor a rally to new highs beyond the late October high at 26,182 to pattern counts near 27,000 and 27,600.

U.S. 10-year breakeven rate eases within anchored range between 2.0% and 2.5%

The Consumer Price Index (CPI) rose to 2.7% year-over-year in November, well below the 3.1% consensus and a down from the +3.0% reading in September. Market-based inflation expectations tell a similar story. The U.S. 10-year breakeven inflation rate, an estimate of average inflation over the next decade, has remained anchored between 2.0% and 2.5% since late 2022. Since July, it has trended lower and currently sits at 2.24%. A drop to the lower end of its range would align longer-term inflation expectations with the Federal Reserve’s 2% target. See inside this report for charts on the U.S. 5-year breakeven rate and the TIPS versus AGG ratio.

Sentiment

AAII Bulls vs. Bears: Room to run based on 13- and 52-week moving averages

Our June 9 Charted Market Insights flagged that individual investor sentiment was coming off its biggest contrarian bullish signal since the savings and loan crisis (see chart notes below). The 13-week average and the spread between the 13- and 52-week averages of AAII Bulls vs. AAII Bears have risen since then and continue to confirm the equity market rally into December. The 13-week average just crossed above zero with room to run toward recent overbought levels well into the 20s. The spread between the 13- and 52-week averages crossed above zero in late July to confirm the rally from the April low and also has room to run prior to reaching levels of complacency.

Chart notes

·         The 13-week average of AAII Bulls minus AAII Bears hit its lowest level since 1990 in April.

·         The spread between the 13-week and 52-week averages for the bulls vs. bears spread fell its lowest level ever of -33.6 in early May, exceeding the previous low of -24.8 from 1990.

·         Both indicators have since risen to confirm the equity market rally into December, with room to run prior to reaching overbought complacent levels.

Chart 1: AAII Bulls versus AAII Bears: 13- and 52-week averages (top) and the spread between the 13- and 52-week averages (bottom)

Source: Optuma, The American Association of Individual Investors (AAII), Suttmeier Technical Strategies

Handles not yet showing conviction

SPX and NDX: No conviction yet for the handles of the developing cup and handles

December price action has been lackluster, but breadth has been solid, and a potential bullish leading indicator, as both the S&P 500 (SPX) and NASDAQ 100 (NDX) trade within potential bullish cup and handle patterns from late October (see recent reports and blog posts). Weekly seasonality shifted bullish this week and remains positive into early 2026 (Dec 18 Straight from the Chart). While breadth and seasonality are encouraging, the developing handles need more conviction if both the SPX and NDX are to complete the cup and handles on a push to new highs. Supports are holding so far, but upside follow-through is required to increase confidence.

SPX needs to reclaim 6795 to increase conviction in its bullish cup and handle

The SPX must reclaim the rising 20-day moving average (center line of the Bollinger Bands) and at 6795 to increase confidence in the developing handle of the bullish cup and handle pattern. The 38.2%, 50.0%, and 61.8% retracements of the rally from the cup low to the handle high at 6757 (undercut), 6712 (nearly tested), and 6667, respectively, offer potential support along with the daily Ichimoku cloud span from the 6740s to the 6640s. The early November low at 6631 offers another support. If supports hold and the SPX completes the cup and handle on a breakout to new highs beyond 6900-6920, it would target 7200-7300. If supports break, then the SPX shows risk to its November and October lows near 6550-6520.

Chart 2: S&P 500: Daily chart with Bollinger Bands

Source: Optuma, Suttmeier Technical Strategies

Chart 3: S&P 500: Daily chart with tactical retracement levels and Ichimoku cloud span

Source: Optuma, Suttmeier Technical Strategies

NDX needs to reclaim 25,223 to increase conviction in its bullish cup and handle

The NDX must reclaim the rising 20-day moving average (center line of the Bollinger Bands) at 25,223 to increase confidence in the handle of its bullish cup and handle pattern. The zone between the 38.2% and 61.8% retracements of the rally from the cup low to the handle high and the daily Ichimoku cloud span provide a support zone from 25,000 to 24,600 (also the early November low). The NDX has tested the low end of this zone. If it continues to hold and the NDX completes the cup and handle on a breakout above gap resistance at 25.762-25,888, it would favor a rally to new highs beyond the late October high at 26,182 to pattern counts near 27,000 and 27,600.

Chart notes

·         If the 24,600 level breaks, it would expose the October and November lows (also the lower Bollinger Bands) at 24,200 and 23,850.

·         The 27,600 level is also the target for the mid 2025 breakout.

Chart 4: NASDAQ 100: Daily chart with Bollinger Bands

Source: Optuma, Suttmeier Technical Strategies

Chart 5: NASDAQ 100: Daily chart with tactical retracement levels and Ichimoku cloud span

Source: Optuma, Suttmeier Technical Strategies

Inflation expectations have eased

U.S. 10-year breakeven rate eases within anchored range between 2.0% and 2.5%

The Consumer Price Index (CPI) rose to 2.7% year-over-year in November, well below the 3.1% consensus and a down from the +3.0% reading in September. Market-based inflation expectations tell a similar story. The U.S. 10-year breakeven inflation rate, an estimate of average inflation over the next decade, has remained anchored between 2.0% and 2.5% since late 2022. Since July, it has trended lower and currently sits at 2.24%. A drop to the lower end of its range would align longer-term inflation expectations with the Federal Reserve’s 2% target.

Chart notes

·         The U.S. 10-year breakeven inflation rate is derived from the yield spread between nominal 10-year Treasuries and the 10-year Treasury Inflation-Protected Securities (TIPS).

·         Rising breakeven rates can signal concerns about future inflation, while falling rates may reflect confidence in disinflation or weaker growth.

Chart 6: U.S. 10-year breakeven inflation rate: Daily chart

Source: Optuma, Federal Reserve Bank of St. Louis via FRED®, Suttmeier Technical Strategies

U.S. 5-year breakeven rate eases within anchored range between 2.0% and 2.7%

The U.S. 5-year breakeven inflation rate provides an estimate of average inflation over the next five years. Other than a September 2024 probe down to 1.86%, it has remained anchored between 2.0% and 2.7% since late 2022. Since February, the 5-year breakeven rate has trended lower to reflect decreasing inflation expectations and has the potential to break below support at 2.28%-2.25%. This would suggest a drop toward the lower end of its trading range, which would align the 5-year breakeven with the Fed’s 2.0% inflation target.

Chart notes

·         The U.S. 5-year breakeven inflation rate is derived from the yield spread between nominal 5-year Treasuries and the 5-year Treasury Inflation-Protected Securities (TIPS).

·         Rising breakeven rates can signal concerns about future inflation, while falling rates may reflect confidence in disinflation or weaker growth.

Chart 7: U.S. 5-year breakeven inflation rate: Daily chart

Source: Optuma, Federal Reserve Bank of St. Louis via FRED®, Suttmeier Technical Strategies

A falling TIPS vs. AGG ratio points to easing inflation expectations

The iShares TIPS Bond ETF (TIP) relative to the iShares Core U.S. Aggregate Bond ETF (AGG) continues to signal sideways-to-lower inflation expectations. A recent breakdown in the TIP/AGG ratio suggests inflation expectations may drift back to the lower end of their 2022–2025 trading range (Dec 18 Straight from the Chart). Fibonacci retracements of the 2020–2022 rise reinforce this view, with inflation expectations contained between the 38.2% retracement at 1.12 and the 61.8% retracement at 1.08. Sustaining this week’s break below the 50% level near 1.10 would strengthen the case for further easing, implying a move in TIP toward the 61.8% retracement versus AGG.

Chart notes

·         The iShares TIPS Bond ETF (TIP) seeks to track the investment results of an index composed of inflation-protected U.S. Treasury bonds.

·         The iShares Core U.S. Aggregate Bond ETF (AGG) seeks to track the investment results of an index composed of the total U.S. investment-grade bond market.

·         An increasing TIP vs. AGG ratio: TIP is leading AGG to suggest rising inflation expectations.

·         A decreasing TIP vs. AGG ratio: TIP is lagging AGG to suggest falling inflation expectations.

·         A sideways TIP vs. AGG ratio: Neither TIP nor AGG is leading or lagging to suggest contained inflation expectations.

Chart 9: iShares TIPS Bond ETF (TIP) relative to iShares Core U.S. Aggregate Bond ETF (AGG): Weekly chart

Source: Optuma, Suttmeier Technical Strategies

Suttmeier Technical Strategies, LLC (STS) provides financial commentary and market analysis for educational and informational purposes only. We are not registered investment advisors, and nothing published by STS should be considered personalized investment advice, a recommendation to buy or sell any security, or a solicitation to engage in investment activity. All content is impersonal and does not consider your individual financial circumstances. Past performance is not indicative of future results. Investing involves risk, and you should consult with a licensed financial advisor before making any investment decisions. STS or its representatives may hold positions in securities mentioned in our publications. Such holdings are subject to change without notice and do not constitute investment advice.