RJ Hamster
TheoTrade
December 03, 2025 | Read Online
Hey, it’s Blake.
Most traders treat December like some magical rally month. Not this year. While everyone’s chasing the usual year-end pump, I’m doing something completely different – building positions in dividend-paying stocks that just got crushed.
Here’s why this pullback is exactly what I’ve been waiting for.
The Contrarian Setup Everyone’s Missing
Look, I’ve been saying this for weeks – we’re going to see tax loss harvesting into year-end, even though normally I wouldn’t care about that.
Usually when you’ve had a positive quarter, there’s not much loss harvesting to do. But we’re off the highs significantly, and that’s exactly what creates opportunity.
Yesterday’s action proved my point.
We’re sitting right at fair price on the S&P – that 50% level where all of October’s price action determined this was the right value for December. And we’re stuck. Stuck, stuck, stuck.
I don’t expect new highs. I really don’t.
What I expect is choppy action for two weeks, then a potential pullback to 670, maybe even 654 if the harvesting gets aggressive.
That’s about a 5% drop – not catastrophic, just end-of-year housekeeping that creates buying opportunities.
Where I’m Putting My Money
Energy – The Play Everyone’s Ignoring
XLE just gave me exactly what I want to see. The green line turned from 58 to 62 – that’s my buy signal. We started December with new support levels, and even though we pulled back yesterday, the setup is intact. 
I’m comfortable risking $1 per share with a stop at $89, looking for a move back to $91-92.
But here’s the kicker – these energy stocks pay serious yields while I wait for price appreciation.
Clean risk, clear reward, plus income while you hold. We’re getting an intermediate confirmation in the oversold area, which is exactly the defensive setup I want heading into year-end uncertainty.
Consumer Staples – The Short Put Goldmine
Here’s where it gets interesting. XLP just flashed a buy signal yesterday – green line rising, red line in oversold territory. It’s like a bull flag setup, but I’m not buying the ETF.
I’m looking at individual stocks for short put opportunities. Take Proctor & Gamble – down 2.33% yesterday on good volume.
Why are we selling P&G when it just broke out multiple times?
The crazy thing about P&G’s selloff – implied volatility is only at the 23rd percentile. This thing gaps down 2.36% and IV barely budges. That tells me options are cheap.
My Short Put Strategy:
I need two things: 2.5% premium collection with a 5% margin of safety below my strike.
So if I collect 2.5% and have a 5% cushion, I’ve got room for the stock to drop $7 and still be profitable.
You get 3-4 weeks of premium, own quality companies at good prices, and that safety margin protects you.
Look at P&G’s history – every bullish cluster setup paid out whether the stock went up immediately or tested lower first. We could capture multiple weeks of premium with built-in protection.
Utilities – The Defensive Opportunity
XLU gave us a short signal yesterday, but I still like utilities defensively. We tried to break out, then slammed down – that volatility creates opportunity.
If we get down to 87.50 and defend it with a new bullish cluster, we could have a buy signal at a key support level. That’s when I’ll look at individual names like NEE.
The potential to buy defensive dividend stocks while everyone else panics? That’s exactly what I’ve been waiting for.
How to Execute This Strategy
Energy Plays:
- Buy around $90, stop at $89
- Target $91-92 plus yield income
- Risk $1 to make $1-2
Staples Short Puts:
- Wait for bullish clusters on gap-down days
- Collect 2.5% premium with 5% safety margin
- Target 3-4 week expirations
- Own quality companies at good prices
Utilities:
- Watch 87.50 support defense
- Target individual dividend payers on bullish clusters
The December Reality
Everyone’s positioning for some magical rally. I’m positioning for reality. When everything’s sitting at 50% retracement levels, that’s not screaming “buy everything.”
But quality dividend stocks getting unfairly punished at technical support levels? Energy names with serious yields at buy signals? Consumer staples with 23rd percentile IV after gap-downs?
That’s where I’m putting my money while everyone else chases ghosts.
The market’s telling us we’re going to chop. Fine. I’ll collect income and premium while we chop. When tax loss harvesting hits in two weeks, I’ll have positions ready and cash flowing.
Sometimes the best trade is the one everyone else isn’t making.
I’ll be going live intomorrow to walk through:
- My top idea for December: The exact entry and exit levels
- Why this setup is different from everything else I’m seeing
- How to position size for maximum safety with serious upside potential
This is a one-time event. I’m not doing this again in December.
Thursday, December 4th (that’s 1 PM EST)
Fair warning – when I get excited about a technical setup like this, it usually doesn’t stay quiet for long. The market has a way of moving fast when the pieces align.
Don’t miss this one.
Stay Frosty,
Blake Young
See The Move BEFORE It Hits The Tape
NEW: The Ghost Prints Surveillance Console detects institutional movement before price reacts—so you’re acting on pressure, not chasing candles.
Update your email preferences or unsubscribe here
© 2025 Disclaimer: Neither TheoTrade or any of its officers, directors, employees, other personnel, representatives, agents or independent contractors is, in such capacities, a licensed financial adviser, registered investment adviser, registered broker-dealer or FINRA|SIPC|NFA-member firm. TheoTrade does not provide investment or financial advice or make investment recommendations. TheoTrade is not in the business of transacting trades, nor does TheoTrade agree to direct your brokerage accounts or give trading advice tailored to your particular situation. Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction or investment.Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past Performance is not necessarily indicative of future results.
PO Box 24790
Christiansted, Virgin Islands 00824, United States of AmericaTerms of Service
