Trading The Close Market Recap - 12/29/2025: Holiday-Week Low Volume Sparks Reversals — Bitcoin vs Natural Gas, Silver Shock & Micron Resistance

Welcome back to the markets. As traders return from a holiday weekend, they are greeted by another holiday-shortened week, a dynamic that often brings its own unique set of trading conditions. In this afternoon's Trading The Close, Pro Trader Drew Dosek of Verified Investing dissected a market characterized by light volume, indecisive price action, and dramatic moves in key commodities.

While major indices saw a slight decline, the real stories unfolded beneath the surface. From powerful reversal patterns in the tech sector to conflicting signals in Bitcoin and Natural Gas, and a violent shakeout in precious metals, the day provided a masterclass in technical analysis. Today, we'll delve deeper into these key themes, exploring the underlying mechanics and what they signal for the final trading days of the year.

The Holiday Volume Effect

The final week of the year is notoriously quiet. With many institutional traders and investors on vacation, volume tends to dry up, creating a distinct market environment. While this might seem like a recipe for a stagnant market, it often produces a specific, predictable bias. As Drew explained on the show:

"This is holiday week, so we should have lighter volume. Lighter volume does dictate and naturally does produce neutral to upside bias."

This concept is crucial for traders to understand. In a low-volume environment, it takes significantly less capital to move prices. However, it also means there isn't the institutional weight required to sustain a major sell-off. Without heavy, persistent selling pressure, any dips are often quickly bought up by the remaining market participants. This dynamic was on full display in the S&P 500, which was down earlier in the session but fought its way back to close with only a minor 0.27% loss.

This "neutral to upside bias" is a product of market structure. In the absence of a major negative catalyst, the path of least resistance is often sideways to slightly higher. This is also a period of "window dressing," where fund managers may buy up high-flying stocks to make their end-of-year portfolios look more impressive, and "undressing," where profits are taken on the year's biggest winners. This push and pull between buyers and sellers, without the force of high volume, often results in choppy, indecisive action, perfectly exemplified by the doji candle that formed on the S&P 500 chart—a classic sign of a stalemate between bulls and bears.

The "Sleeper Hold" Reversal

While the overall market was quiet, specific technical patterns that formed on Friday signaled the potential for today's pullback. Drew highlighted a powerful setup he calls the "sleeper hold," which appeared on the charts of the S&P 500 (SPY), the Nasdaq 100 (QQQ), and the Semiconductor ETF (SMH).

This pattern, characterized by a strong vertical move into a key resistance level, often precedes a reversal or consolidation. It acts as a warning that a trend is overextended and likely to pause.

• Nasdaq 100 (QQQ): The setup was particularly clean on the QQQ, which ran directly into a resistance level Drew had identified at $624.97. The result was a swift rejection, leaving the index in what he termed "no man's land"—caught between that key resistance and the next major support level at the bottom of its parallel channel, around $611.65.
• Semiconductors (SMH): The semiconductor sector followed a similar script, tagging resistance on Friday before selling off slightly today. The key levels to watch here are the well-defined resistance at $367.56 and the next support level at the 50% line of its parallel channel, located at $354.31.

These examples underscore the predictive power of technical analysis. By identifying high-probability patterns at critical price levels, traders can anticipate potential turning points and manage risk accordingly, rather than being surprised by sudden reversals. The "sleeper hold" provided an advance warning that the market's recent upward momentum was likely to hit a wall.

Bitcoin and Natural Gas: A Tale of Conflicting Signals

Two of the most fascinating charts discussed today were Bitcoin and Natural Gas, both of which are exhibiting a classic technical conflict: a bearish long-term pattern versus a bullish short-term pattern. This divergence creates a complex and challenging environment, but also one ripe with opportunity for disciplined traders.

Bitcoin's Battle of Timeframes

On a weekly timeframe, Bitcoin has been consolidating for seven weeks in what appears to be a bear flag pattern—a formation that typically resolves to the downside. This long-term structure suggests that the path of least resistance is lower. However, zooming into the daily chart reveals a different story.

"We pushed up. And what have we done? We've had sideways consolidation. Now, that's all bullish consolidation here, near term, larger term, bearish consolidation. A little bit of conflicting signals."

Since December 19th, Bitcoin has been consolidating sideways in a tight range. This type of consolidation after an upward move is typically bullish and suggests the asset is gathering energy for another leg higher. Adding to the complexity are the large wicks appearing on top of recent daily candles near the $90,000 level, indicating that sellers are still present and actively pushing the price down from these highs.

This creates a technical tug-of-war. The long-term trend suggests caution, while the short-term action hints at a potential breakout. A sustained period of this bullish consolidation could exhaust the sellers, allowing a test of the next resistance near $93,000. A failure of the larger bear flag pattern could ultimately propel Bitcoin much higher, towards trendline resistance around $103,000.

Natural Gas Mirrors the Conflict

The chart of Natural Gas presents a strikingly similar dilemma. A longer-term bear flag formation points towards a potential decline to support at $3.30. Yet, the price action over the last four trading days has been a constructive, sideways consolidation—a near-term bullish signal.

As Drew noted, the longer-term pattern usually dominates, suggesting that the odds favor an eventual move lower. However, traders must remain vigilant. A decisive break above the near-term trendline at $4.20 would negate the bearish pattern and could "release the hounds," sending Natural Gas surging towards its next resistance level at $4.46.

In situations with conflicting signals, patience is paramount. Traders must wait for the market to resolve the conflict by either confirming the long-term pattern with a breakdown or negating it with a breakout.

A Violent Reversal in Precious Metals

The biggest story of the day was the dramatic price action in gold and silver. After a period of strength, both metals experienced significant selling pressure, providing a textbook example of how quickly sentiment can shift.

Gold Finds Support at a Critical Level

Gold printed a massive red candle, wiping out recent gains. However, the most telling aspect of the move was not the decline itself, but where it stopped. The selling concluded precisely at the 50% area of its parallel channel, around $4,333. This is not a coincidence; these mid-points of channels often act as powerful magnets for price. Drew pointed out that a similar large red candle in the recent past led to further downside, suggesting that the probabilities now favor consolidation followed by a potential test of the lower end of the channel near $4,219.

Silver's "Shot Across the Bow"

The move in silver was even more violent. After a spectacular 10% rally on Friday that saw it break above $80.00 USD and touch a high of $83.75, the metal reversed sharply. The reversal began with a 10-minute topping tail—a clear intra-day signal of resistance—and devolved into a cascade of selling that lasted the entire session.

"Guys, this is a shot across the bow. This is a big red candle, one to pay attention to on the charts, one that likely will control price and help push price down to the next support at sixty two dollars and thirteen cents."

This type of reversal is a stark reminder of silver's historical volatility. As Drew noted, massive pops in silver are almost always followed by huge declines. While a longer-term cup and handle pattern still points to a potential target of $89.38, today's brutal reversal suggests that this target is unlikely to be reached on the current move. The big red candle now acts as a significant technical barrier, and the odds have shifted in favor of a deeper correction.

Micron's Date with a Wall of Resistance

Amidst the mixed action, Micron (MU) stood out as a "shining star," climbing another 3.36%. The stock has been on a tear, marching steadily higher day after day. However, this powerful ascent is now heading directly into a formidable confluence of technical resistance, creating one of the highest-probability setups discussed on the show.

Drew identified three distinct resistance levels converging in a very tight price zone between $300 and $305:

1. A Near-Term Trendline: An hourly trendline providing immediate resistance around the $300 mark.
2. A Long-Term Trendline: A major trendline drawn from the June 2025 pivot high, coming in around $301.
3. The Parallel Channel Top: The top end of the stock's primary ascending channel, located at $305.

"Whenever I get convergence of three different zones of resistance, that's telling me the breaks are likely going to be hit and price action is likely going to be coming down on the charts of Micron."

This is what technical analysts refer to as a "confluence zone." When multiple, independent technical factors all point to the same price area as resistance, the probability of that level holding increases dramatically. Given the stock's massive run, it would be highly unusual for it to slice through such a dense thicket of resistance in one attempt. This makes the $300-$305 zone a logical area for traders who are long Micron to consider taking profits.

Conclusion: Navigating the Year-End Crosscurrents

The final trading days of the year present a unique environment defined by low volume, end-of-quarter positioning, and conflicting technical signals. Today's market action served as a perfect illustration of these dynamics. While the broader indices drifted, individual assets like silver and Micron provided clear, actionable technical events.

The key takeaway for traders is the importance of adaptability and precision. In a market with conflicting long-term and short-term signals, like Bitcoin and Natural Gas, the prudent approach is to wait for confirmation. In a market showing clear signs of exhaustion at resistance, like the Nasdaq and Micron, risk management and profit-taking become priorities. And in a market experiencing a violent character change, like silver, it's crucial to respect the new trend. By focusing on multi-factor analysis and well-defined price levels, traders can navigate these holiday crosscurrents with clarity and confidence.