🚀 MARKET SURGE INCOMING: Fed Pivot & Sector Rotation Ignite Historic Rally Setup

⚡ KEY THINGS TO KNOW FOR WEDNESDAY, NOVEMBER 26, 2025

The market delivered a powerful dose of pre-Thanksgiving optimism Tuesday as a dramatic sector rotation sent traditional value names soaring while tech fought to regain its footing. SPY closed at $668.73 on November 25, 2025, rallying from the previous close of $659.03. The NVDA stock closed at $182.55 on November 24, 2025, though fell to approximately $175.81 during Tuesday's session amid Google TPU competition concerns. Bitcoin stabilized around $88,500 after recent volatility.

BREAKING: Kevin Hassett emerged as the frontrunner to become the next Federal Reserve chair on November 25, 2025, sending dovish signals through markets and triggering massive rotations into rate-sensitive sectors.

The Bottom Line: Markets are experiencing a healthy broadening rally with Russell 2000 up 2%, financials hitting new highs, and VIX collapsing below 19 - setting up potential year-end melt-up scenario heading into December FOMC.

📊 MARKET PULSE: THE GREAT ROTATION IS HERE

Tuesday's Session Snapshot

• SPY: $668.73 (+1.47% from prior close)

• QQQ: Recovering after Monday's +2.7% surge

• IWM (Small Caps): +2% - LEADING THE CHARGE

• VIX: Down to 19.14 (-6.58%)

• 10-Year Treasury: Dipped below 4% for first time since late October

Market Breadth: Exceptional - 84 of 93 largest non-tech stocks GREEN, equal-weight outperforming cap-weighted indices significantly.

🔥 TRUMP MOMENTUM & WHITE HOUSE IMPACT

Breaking Political Catalysts:

1. Kevin Hassett Fed Chair Frontrunner White House National Economic Council Director Kevin Hassett is seen as the frontrunner to be the next Federal Reserve chair, with advisers viewing him as someone who would bring Trump's approach to interest-rate cutting to the Fed.

Market Impact:

• USD Dipped immediately on dovish interpretation

• Gold surged +1.9% to $4,196.60

• Rate-cut probability for December now near certainty

• Financials, homebuilders, and regional banks EXPLODED higher

2. Ukraine Peace Deal Progress Trump stated: "THINK WE ARE GETTING VERY CLOSE TO DEAL ON UKRAINE"

• White House Press Secretary noted delicate details requiring further talks between Ukraine, Russia, and US

• Reduced geopolitical risk premium

• Defense sector mixed, peace dividend flowing to cyclicals

3. Consumer Confidence Data US November CB Consumer Confidence fell to 88.7 from 94.6, missing estimates of 93.3

• BUT: Market shrugged it off on Fed rate-cut expectations

• Pending Home Sales rose 1.9% M/M, beating 0.2% forecast

• Housing showing resilience ahead of anticipated rate cuts

💎 SECTOR ROTATION: WHERE THE SMART MONEY MOVED

🟢 BULLISH SECTORS (Tuesday's Winners):

1. FINANCIALS - THE NEW LEADERS ⭐⭐⭐⭐⭐

• XLF: +1% to $53.68, YTD gain over 11%

• Goldman Sachs, JPMorgan, Morgan Stanley, BofA - ALL HIT 52-WEEK HIGHS

• Trade: Long $GS, $JPM, $MS calls into year-end

• Catalyst: Hassett pick signals accommodative policy = wider lending margins

2. HOMEBUILDERS & REAL ESTATE ⭐⭐⭐⭐⭐

• XHB: Massive call volume (Put/Call ratio: 2021/8665)

• Trade Idea: $NAIL 3x leveraged homebuilder ETF

• Entry Zone: Current levels

• Target: 15-20% move into December

• Catalyst: Sub-4% 10-year yield + pending home sales strength

3. SMALL CAPS (IWM/Russell 2000) ⭐⭐⭐⭐⭐

• +2% session - best performance in months

• IJR SmallCap 600 ETF: +7.3% over last 3 days

• Rate-sensitive names benefiting from yield compression

• Trade: Long $IWM December calls, $240-245 strike zone

4. RETAIL & CONSUMER DISCRETIONARY ⭐⭐⭐⭐

• $ANF (Abercrombie): +22.62% - $3.09 close - HOMERUN EARNINGS

• $WMT, $HD, $TGT: All participating in rotation

• $CMG: +6.5% on consumer demand optimism

• Holiday shopping season setup improving

5. MATERIALS & COMMODITIES ⭐⭐⭐⭐

• Gold +1.9% breaking to new highs

• Silver rallying on Hassett headline

• Base metals showing strength

• GLD massive December call spread open interest

🔴 BEARISH/CONSOLIDATING SECTORS:

1. SEMICONDUCTORS/AI CHIPS ⚠️⚠️⚠️ $NVDA - The TPU Drama

• Closed around $175.81 (-3.68% on session)

• Down from $182.55 November 24 close

• Catalyst: Google TPUs reported being used by Meta, intensifying competition

• NVDA Response: "Delighted by Google's success," "generation ahead of industry"

• Trade Rating: 3/5 - Wait for $170 support test

• Entry Zone: $168-172 for swing longs

• Target: $195-200 by year-end if holds support

$AMD

• Initially down -8%, recovered to close -5.7%

• CEO Lisa Su forecast 35% annual revenue growth next 3-5 years

• Still trading 33x P/E

• Entry: $255-260 zone on any further weakness

2. MEGA-CAP TECH ⚠️⚠️

• Taking profits after strong run

• Rotation INTO value and cyclicals

• $GOOGL: Actually UP on TPU news (+5-6%)

• $META: Participating in tech recovery

• Opportunity: Dips in quality names are buyable

🏛️ FED & ECONOMIC DATA IMPACT

Rate Cut Probability SURGES:

December FOMC Meeting (December 10):

• Market pricing in 25bp cut at ~70%+ probability

• Hassett would prefer a larger interest-rate cut when policymakers meet in December

• NY Fed President Williams signaled QT ending soon

Inflation Outlook: Conference Board: Consumers' average 12-month inflation expectations remained elevated, median rate increased to 4.8%

UBS Warning: US inflation expected to rise into 1H26, with core PCE reaching around 3.2% in Q2 2026

Trading Strategy: Market looking through near-term inflation concerns, betting on Fed dovishness trumping inflation persistence.

₿ BITCOIN & CRYPTO SENTIMENT BREAKDOWN

Current State:

• BTC: ~$88,500 (consolidating after -30% decline from $126K ATH)

• Fear & Greed Index: 20/100 - EXTREME FEAR

• Crypto Fear & Greed: 20/100 - EXTREME FEAR

🚨 MAJOR CATALYSTS:

1. TEXAS BITCOIN RESERVE - HISTORIC FIRST ⭐⭐⭐⭐⭐ Texas becomes first state to buy Bitcoin, investing $10 million into its Strategic Reserve

Significance:

• First state to commit PUBLIC FUNDS to BTC

• $10M allocation from $338B biennial budget

• Sets precedent for other states

• 47 Bitcoin reserve bills introduced across 26 states

Trade Impact:

• Validates institutional adoption thesis

• State-level FOMO could accelerate

• $COIN, $RIOT, $MARA beneficiaries

2. Congressman Warren Davidson: US can fund its Bitcoin Reserve by accepting taxes in BTC

3. Russia Expands Crypto Investment Options

• Geopolitical adoption accelerating

• Alternative payment rails gaining traction

CRYPTO TRADES FOR WEDNESDAY:

High Conviction:

• $COIN: Entry $235-240, Target $275-285 (+15%)

  • Polymarket secured CFTC approval to operate fully as exchange for US retail users

  • Regulatory tailwinds building

• $RIOT: Call flow detected, crypto mining beneficiary

Bitcoin Strategy:

• Accumulation Zone: $85K-90K

• Target: $110K-120K by Q1 2026

• Institutional buying on dips continues

📈 HIGH-PROBABILITY TRADES FOR NOVEMBER 26

⭐⭐⭐⭐⭐ HIGHEST CONVICTION:

1. SMALL CAP VALUE ROTATION

• Ticker: $IWM (Russell 2000 ETF)

• Entry: $244-246

• Target: $260-265 (+6-8%)

• Stop: $240

• Timeframe: 2-3 weeks

• Catalyst: Fed dovish pivot, breadth expansion, small-cap value leading

• Trade Rating: 9/10

2. HOMEBUILDER EXPLOSION

• Ticker: $XHB or $NAIL (3x leveraged)

• Entry: Current levels (XHB ~$120)

• Target: $135-140 (+12-15%)

• Catalyst: Pending home sales beat expectations, 10-year yield sub-4%

• Options: December $125 calls

• Trade Rating: 9/10

3. FINANCIAL SECTOR BREAKOUT

• Tickers: $GS, $JPM, $MS

• Entry: Current 52-week high breakouts

• Target: Additional 8-12% into year-end

• Catalyst: Wider margins, dovish Fed, economic resilience

• Trade Rating: 8/10

⭐⭐⭐⭐ STRONG CONVICTION:

4. ABERCROMBIE MOMENTUM

• Ticker: $ANF

• Last Price: $3.09 (+22.62%)

• Entry: Current or slight pullback to $2.95-3.00

• Target: $3.40-3.60 (+15-20%)

• Catalyst: Beat-and-raise earnings, holiday strength

• Trade Rating: 8/10

5. GOLD CONTINUATION

• Ticker: $GLD

• Entry: $236-238

• Target: $250-255 (+6-8%)

• Catalyst: Fed dovishness, geopolitical hedge, massive call OI

• Trade Rating: 7/10

6. CRYPTO EXCHANGE PLAY

• Ticker: $COIN

• Entry: $235-242

• Target: $275-290 (+15-20%)

• Catalyst: CFTC approval for Polymarket, regulatory clarity improving

• Trade Rating: 8/10

⭐⭐⭐ MODERATE CONVICTION:

7. NVIDIA DIP BUY (CONTRARIAN)

• Ticker: $NVDA

• Entry: $168-172 (wait for support test)

• Target: $195-205 (+15%)

• Stop: $165

• Catalyst: "Generation ahead" narrative, oversold on TPU fears

• Trade Rating: 6/10 - WAIT FOR SETUP

8. AMD RECOVERY

• Ticker: $AMD

• Entry: $255-262

• Target: $290-300 (+12-15%)

• Catalyst: 35% revenue growth guidance, AI chip demand

• Trade Rating: 7/10

🎯 TOMORROW'S GAMEPLAN: NOVEMBER 26, 2025

Pre-Market Watch (Before 9:30 AM ET):

Economic Data:

• None scheduled (pre-Thanksgiving)

• Light volume expected

Futures Levels to Watch:

• ES (S&P Futures): 6,750-6,780 resistance, 6,700 support

• NQ (Nasdaq Futures): 22,900-23,000 pivotal

Key Overnight Catalysts:

• Any Hassett Fed Chair confirmation

• Ukraine peace deal updates

• Asian/European market reaction

Market Open Strategy (9:30-10:30 AM):

Scenario 1: Gap Up Open (+0.3-0.5%)

• Let initial momentum play out

• Look for dips in small caps/financials for entries

• Avoid chasing extended names

Scenario 2: Flat to Slight Gap Down

• AGGRESSIVE BUY OPPORTUNITY

• Small caps, homebuilders, financials on watchlist

• Use any weakness to establish positions

Expected Behavior:

• Light volume due to holiday week

• Momentum likely to continue from Tuesday

• Rotation theme should persist

Intraday Levels:

SPY:

• Resistance: $673, $675, $680

• Support: $665, $662, $660

IWM:

• Resistance: $248, $250, $253

• Support: $243, $240

QQQ:

• Resistance: $610, $615

• Support: $600, $595

Sector Focus:

LONG:

• Small caps (IWM, IJR)

• Financials (XLF, GS, JPM)

• Homebuilders (XHB, NAIL)

• Retail (XRT, ANF, WMT)

• Gold/Silver (GLD, SLV)

NEUTRAL/WATCH:

• Mega-cap tech (waiting for entries)

• Semiconductors (watching for bottoming signals)

AVOID:

• High-beta, low-quality names

• Extremely extended stocks

📅 KEY CATALYSTS AHEAD

This Week:

• Wednesday: Light volume, position ahead of holiday

• Thursday: Markets CLOSED (Thanksgiving)

• Friday: Half-day trading, Black Friday data watching

Next Week:

• December 2: ISM Manufacturing

• December 4: JOLTS Job Openings

• December 6: Nonfarm Payrolls (CRITICAL)

• December 10-11: FOMC Meeting (25bp cut expected)

💰 OPTIONS FLOW HIGHLIGHTS

Unusual Activity Tuesday:

Bullish:

• $TMO: Opening bull bets detected

• $RKT: Repeat buying, 86K calls vs 26K puts

• $TECK: Extreme call buying (11K calls vs 463 puts)

• $LVS: Fund rolled $100M position into March $55 calls

Bearish:

• $ARM: $2M in-the-money puts, January 2026 $150 strike

Gamma Positioning:

• $SPY: $1.4B call wall at $675 - magnet effect

• $SPY: $1.3B GEX at $670 - price pinned near this level

🔮 TECHNICAL ANALYSIS & MARKET STRUCTURE

S&P 500:

• Back above 50-day MA (bullish)

• +3.3% over last 3 days (best since mid-May)

• Just 2.5% from all-time highs

• Momentum shifting positive

Nasdaq:

• Recovering from November selloff

• Need to hold 22,800 support

• Rotation temporarily pressuring, but fundamentals intact

Russell 2000:

• BREAKOUT mode - cleared key resistance

• Leading the market (bullish breadth signal)

• Most responsive to rate-cut narrative

VIX:

• Collapsed to 19.14 from recent highs

• Extreme fear dissipating

• Options sellers re-entering market

🏦 BANK OF AMERICA OUTLOOK

Bank of America expects 2026 US growth of 2.4%, supported by five key tailwinds: OBBBA stimulus (adds 0.3-0.4pp to GDP), Fed cuts, trade policy improvements, AI investment, and base effects

BofA 2026 Projections:

• GDP Growth: 2.4%

• Headline PCE: 2.6%

• Core PCE: 2.8%

• Unemployment: Falls to 4.3%

Investment Implication: Goldilocks scenario - growth without overheating supports continued equity gains.

⚠️ RISK FACTORS TO MONITOR

Near-Term Concerns:

1. Inflation Persistence: 4.8% consumer expectations concerning

2. Valuation: S&P trading over 20x earnings

3. AI Bubble Fears: 45% of allocators cite this as biggest tail risk

4. Geopolitical: Ukraine, Middle East remain wildcards

Bull Case Intact IF:

• Fed delivers December cut

• Economic data remains resilient

• Earnings growth continues (double-digit expected 2025)

• Breadth expansion sustains

🎓 DCG MASTERMIND INSIGHTS

From the Trading Floor:

Adam Mancini: Successfully called 6,755 ES target, giving entries at 6,701 recovery. Now watching 6,780-6,805 upside targets.

Jason (@3PeaksTrading): "Bears and vol buyer guys are going to be surprised when VIX is back at 15 next month." Notes massive December call spreads in gold, rate cut now "slam dunk."

JaguarAnalytics: "93 of largest non-tech stocks: 84 green, 9 red. Power candles in banks, housing, retail, metal, chemicals, transports." Emphasizes breadth expansion.

Kobeissi Letter: Posted alert for premium members to BUY SPX at 6,595, targeting 6,800. Position deep green.

📢 FINAL WORD: THE OPPORTUNITY

We're witnessing a CLASSIC BULL MARKET ROTATION - not a top, but a broadening of leadership that historically EXTENDS bull runs. When small caps lead alongside quality value names while tech consolidates, it creates the foundation for sustainable gains.

The Setup:

• Dovish Fed pivot incoming

• Breadth expanding dramatically

• Fear indicators resetting

• Institutional money rotating, not exiting

• Seasonal tailwinds into year-end

Wednesday's Action Plan:

1. Own the rotation - Small caps, financials, homebuilders

2. Be patient on tech - Wait for clear bottoming signals

3. Scale into quality - Don't chase, use pullbacks

4. Manage risk - Light volume can create volatility

5. Think December - FOMC meeting will be next major catalyst

This is NOT the time to be defensive. This IS the time to be positioned for year-end strength.

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Disclaimer:

This newsletter is for informational purposes only. All trades carry risk. Prices and data verified as of November 25-26, 2025. Past performance does not guarantee future results. Always conduct your own due diligence and consider your risk tolerance before trading.

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- DCG Command Center Team 

"Rotation is the lifeblood of a bull market."

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