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Pull up the four-hour MACD on the S&P 500. 

You can draw a straight line across it.

That horizontal line tells you everything about this market. The algorithms have locked us in a range between 6,800 and 6,900. They will not let it die.

I keep thinking about the 1990 horror film Flatliners. Medical students shock each other's hearts until they flatline on the table. Then they grab the paddles and bring each other back to life.

This market operates the same way. Every time technicals suggest a rollover, machines pump it right back up. Just when you think it will die, the paddles come out.

I have traded for 38 years. The chances of breaking below 6,800 through year end are zero.

The Genesis Cog Scanner tracks exactly when this algorithmic defense pattern breaks. 

Today I am showing you what drives the flatline, why January changes everything, and how to position before the trap door open.

The Mechanical Cause

December trading follows a script that has nothing to do with fundamentals.

Fund managers need acceptable fourth quarter numbers. Performance bonuses depend on it. They need to call clients in January and point to returns.

So they execute one strategy relentlessly:

• Sell anything at 52-week lows for tax loss harvesting
• Buy anything at 52-week highs for window dressing
• Ignore consumer confidence hitting four-month lows
• Ignore housing sellers pulling listings at record pace

Research is dead in December. Nobody analyzes balance sheets. The machines simply defend the slope until the calendar flips.

I watched the market drop 15 points this morning. Within minutes, buyers bid it back up 20. That pattern will repeat every single day through December 31st.

The stochastic points up. The MACD points up. Every momentum indicator says buy the dip. Fighting this tape destroys accounts.

What Happens When We Drop

Watch this trade at 6,900. Watch us drop 30 points.

Then it comes back through as if we killed it. They do the paddles and we come back. They flatline it, kill it, rope in the shorts, and bring it right back up.

Take a bet against me. Any one of you. Go ahead. See what happens.

It is clear to me what this market wants. It wants to end the year at 6,900. What the market wants is usually what it gets.

Would I short this? No. I do not have any signals to short it. The MACD is on the way up. The stochastic is on the way up. I just do not see any point to short this unless you are an intraday trader.

The January Trap Door

Nobody needs to own these stocks once the new year begins.

Fund managers wipe the slate clean. The same algorithms defending every dip will stop defending entirely. Window dressing pressure disappears overnight.

I expect a 10 to 15 percent correction in the first quarter. I take offense when people say crash. I never said crash. I said correct.

The mechanics reverse completely. Stocks that got bought simply because they sat near 52-week highs become stocks that get sold. The protection vanishes.

Let the first three days of January pass. Let 401k money get deployed. Let passive funds establish their positions.

By day four, real two-sided trading returns. That is when you start contemplating positions.

The Counterargument Falls Apart

Some will point to strong economic data. Real GDP increased at an annual rate of 4.3% in the third quarter.

I call it a double-edged sword.

If the economy prints 4.3% growth, why does the Fed need to cut rates? Strong GDP is not a reason to ease monetary policy. You do not need to cut rates with a number like this.

Here is the tell. The 30-year Treasury keeps declining despite rate cuts. Bonds should rally when the Fed cuts. They are not rallying.

The bond market never lies. The Fed just lies. The bond market tells you inflation runs closer to 4.8% than official numbers suggest. They cherry-pick information to make it look like inflation is coming down.

Strong GDP does not save you from a January correction. It actually removes the Fed's justification for riding to the rescue.

How To Trade The Flatline

Do not short this tape through December. Only a couple of my shorts are working. My Walmart is working. My Trimble is working. That is where I make most of my money right now.

The VIX sits at 13. I told Blake Young I expect it to break below 12. Maybe hit 9. An all-time low would not surprise me given how rigged this setup has become. Machines will defend in front of Christmas.

Seven trading days remain in 2025. That window offers no edge for chasing alpha. Please stop chasing tech. January 1st, nobody needs to own it anymore.

If you want to short, short for January. Position now for the correction that comes after the machines stop defending. Give yourself runway into the first quarter when systematic support evaporates.

I hold long positions and short positions. I go to bed and rest my head on the pillow. No forcing trades. No fighting the flatline.

The paddles keep shocking this market back to life until midnight on December 31st. Then the medical students leave the room.

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