They’re calling it the “Santa Rally” again.

Every year around this time, headlines start sounding the same: Stocks drift higher, talking heads smile on news programs, and suddenly everyone forgets about risk. 

Doesn’t matter if the market’s up 3% or 10% in the past month — they slap a red hat on the S&P and call it magic.

But this year’s version smells fake. 

I’ve traded through a lot of Decembers — the euphoric ones, the depressing ones, the sleepy ones where everyone’s watching their iPhones under the desk. 

When a rally is real, you can feel it. 

The volume’s there, the rotation is clean. The bid doesn’t vanish every afternoon like clockwork.

While this market is moving up, it’s not healthy.

Too many names are rolling over underneath the surface. 

The big indexes are floating on the backs of a few mega-caps. 

Meanwhile, small caps are limping and cyclicals are confused. 

And the VIX is relatively low — which always makes me nervous.

This is how I set my jitters aside and focus on what’s important. 

Put it in Perspective 

I’m not saying we can’t go higher, but the rally doesn’t deserve to go higher. 

When a move isn’t earned — when it’s just algorithms and closet indexing pushing names up — that’s the kind of market that pulls the rug fast and hard.

So what do I do with that?

I get picky.

I stop thinking like a retail trader and start thinking like a fund manager trying to protect a strong year. 

Because right now, that’s exactly what a lot of big money is doing: protecting. 

They’re locking in performance, selling premium, lightening up into strength — not chasing charts into illiquid holiday weeks.

I like to say that in December liquidity shrinks but risk doesn’t.

So the edge is in patience and in finding setups where the move hasn’t already happened — where someone’s loading up under the radar.

Right Past Santa Claus Lane

Right now, I’m stalking a few of those.

One is a sleepy mid-cap tech stock that just saw its first multi-week base in over a year. 

No one’s watching it. The IV is cheap and the call flow is quiet but sharp. 

That’s what I want — something that might catch a bid in January, not something everyone’s already piling into.

The other thing I’m watching is volatility itself.

When the VIX sits too still, it’s usually the calm before something stupid. 

Doesn’t mean you short the market blindly, though. It just means you keep risk defined, size trades correctly, and don’t let holiday boredom turn into gambling.

Most people get sloppy in December: They either overtrade weak setups or disappear entirely. 

Neither one makes you money.

This is when I focus on clean entries only. 

I’d rather take one or two A+ trades with size than six maybes. 

And if nothing lines up? Cash pays over 5% right now. 

That’s a decision.

Rallies like this make people feel safe, but the pros are already thinking about Q1. 

They’re thinking about what trades will matter in January, February, and March.

That’s what I’m doing too.

So while everyone else is watching for Santa, I’m watching for setups that don’t care what month it is.

Stay Street Smart,
Jeff Zananiri