Trading Insights 12/8/25

Chart of the Day 📈 12/8/25: Transports, Small Caps Push Tech Aside

Mike Larson | Editor-in-Chief

Transport stocks? Snore. Small caps? Double-snore. That’s been the typical reaction when you mentioned those groups in this all-tech, all-AI, all-the-time stock market. But that may be starting to change!

Just look at these two MoneyShow Charts of the Day. The first shows the iShares Transportation Average ETF (IYT), while the second shows the iShares Russell 2000 ETF (IWM). Both ETFs are really on the move!

iShares Transportation Average ETF (IYT)

iShares Russell 2000 ETF (IWM)

What I’m not showing…but you might be able to infer from my opening comments...is that technology stocks are lagging a bit. In the last month, IYT is up 5.4% and IWM is up 4.4%. The State Street Technology Select Sector SPDR ETF (XLK) is DOWN around 1%.

I try not to overreact to short-term moves. And yes, a one-month change in leadership definitely qualifies as “short term.” But the gradual rotation of money out of tech and into other sectors makes sense, considering questions are being raised about the AI boom.

Plus, the Federal Reserve is expected to cut interest rates again at its Dec. 9-10 meeting. All else being equal, Fed cuts bolster small caps because they tend to be more highly leveraged – and therefore benefit disproportionately from lower borrowing costs.

Several speakers at our MoneyShow Masters Symposium Sarasota last week talked about the potential for rotational action in 2026. They recommended investors add exposure to other sectors rather than stay too overloaded in tech.

It’s early. But the market may be saying that YES, it’s time to do exactly that!

Hou and Torres: Keep These Trends in Mind When Trading the Markets in 2026

In this MoneyShow MoneyMasters Podcast episode filmed at our 2025 Sarasota Symposium, José Torres of Interactive Brokers and Steve Hou of Bloomberg Index Research break down the real drivers behind inflation, interest rate expectations, consumer behavior, quantitative analysis, and more.

They also explain what could derail the growth outlook in 2026, how stretched consumers are reshaping spending trends, what falling volatility is signaling, and where risk may be hiding in both stocks and fixed income. The conversation also digs into index construction, sector weighting effects, profiting from changes in corporate earnings trends, plus the scenarios that could push the Fed into action sooner than markets expect. 

• Markets: "Breadth Thrust" Signals Suggest More Gains Ahead
  👉️ TICKERS: DIA, QQQ, SPY

  There are a number of market breadth indicators that are close to “officially” completing bullish breadth thrusts. Initial setups for breadth thrusts are much more typical after big pullbacks or corrections, though, not with prices near all-time highs, notes John Eade, president of Argus Research.

• SPX: Trading Range Scenario Still in Play Despite Select "Buy" Signals

  👉️ TICKERS: AAPL, DIA

  The S&P 500 Index (^SPX) has stalled near the top of the 6,500-6,900 trading range. This comes after a strong rally the week of Thanksgiving. But unless there is a clear breakout to new all-time highs, the trading range scenario is still dominant, advises Lawrence McMillan, editor of Option Strategist.

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