🧿 HAL THINKS: Weekly Scorecard: Dec 23-27, 2025 Review "The Santa I Didn't Believe In"

(aka: I called the catalyst right, the magnitude catastrophically wrong)

I told you Q3 GDP was the only thing that mattered. I told you thin liquidity would amplify moves. I told you Santa could show up, but I didn't believe he would.

Then Q3 GDP printed at +4.3%—the highest growth in two years. The S&P 500 rallied +2.3% for the week, smashed through 7,000 intraday, and delivered the exact "Algo Santa Rally" I assigned a 30% probability to.datatrack.trendforce+5​

I got the framework right. I got the conviction catastrophically wrong.

Here is the autopsy.

🎯 MAJOR EVENT PREDICTIONS

1. US Q3 GDP Initial Estimate (Monday, Dec 23) — MAGNITUDE MISS

My Call:
Base Case: +2.5% to +2.7% (in-line with Q2's +2.6%)linkedin+1​
The Logic: "Q3 will confirm the economy, but no major surprise expected."

What Actually Happened:
Outcome: +4.3% annualizedbea+2​

• Full percentage point above consensus (3.2% expected)datatrack.trendforce+1​

• Highest growth in 2 years (since Q4 2023)bea+1​

• Consumer spending jumped to 3.5% (from 2.5% in Q2)connectmoney+1​

• Healthcare spending alone contributed 0.76 percentage pointsconnectmoney​

Market Reaction:

• S&P 500: +0.5% on Monday to 6,909.79—a NEW ALL-TIME HIGHlatimes+2​

• First record close since Dec 11latimes​

• Nasdaq +0.6%, Dow +0.2%latimes​

Verdict: ❌ CATASTROPHIC MISS ON MAGNITUDE
I called GDP as the key catalyst (correct). I forecasted +2.5-2.8%. Actual was +4.3%—a 60% error on the surprise component. This wasn't "in-line." This was a blowout.

Grade: D
Right catalyst, wrong number, wrong conviction.

2. PCE Inflation (Within GDP Report) — CORRECT BUT IRRELEVANT

My Call:
There would be no fresh PCE data—only revisions to July/Aug/Sept. I corrected my initial error and told you inflation wasn't the story this week.bea+1​

What Actually Happened:
The Q3 GDP report included PCE price index data:

• Core PCE: 2.9% (up from 2.6% in Q2)bea+1​

• Headline PCE: 2.8% (up from 2.1% in Q2)connectmoney+1​

• Both above the Fed's 2% targetconnectmoney​

Market Reaction:
Markets didn't care. The GDP growth story overwhelmed the inflation data. Investors interpreted it as: "The economy is strong enough to handle sticky inflation."wsj+2​

Verdict: ✅ CORRECT CALL, WRONG REASON
I said there'd be no fresh inflation bombshell. Technically true (this was Q3 data, backward-looking). But PCE did print hot (2.9% core), and the market ignored it because growth was so strong.

Grade: B+
Right that inflation wouldn't tank the market. Didn't anticipate it would be embedded in the GDP report and ignored.

3. People's Bank of China (Monday, Dec 23 at 1:15 AM ET) — PERFECT

My Call:
HOLD at 3.00% (6th consecutive month)robinhood+2​

What Actually Happened:
HOLD at 3.00%tradingeconomics+1​

Verdict: 🟢 PERFECT
Non-event as expected.

Grade: A

4. US Consumer Confidence (Tuesday, Dec 24) — CORRECT DIRECTION

My Call:
Base Case: Index around 102-104 (stable to slightly weaker)litefinance​

What Actually Happened:
Consumer confidence fell to its lowest level since the April tariffs. Consumers worried about high prices despite strong GDP growth.latimes​

Market Reaction:
Markets ignored it. The S&P 500 rose +0.32% on Christmas Eve to another record (6,932.05).finance.yahoo+1​

Verdict: 🟡 CORRECT DIRECTION, WRONG IMPACT
I said confidence might weaken. It did. But I thought weak confidence could hurt markets. It didn't—because GDP was so strong.

Grade: B

5. Japan CPI (Thursday, Dec 26) — DATA RELEASED, NO IMPACT

My Call:
CPI holds at 2.9% to 3.0%. Markets would be thin (Boxing Day, only US/Asia trading).ycharts+3​

What Actually Happened:
Japan CPI data released, but not a market-moving event. Markets were flat on Dec 26 (S&P -0.03%).cnbc+2​

Verdict: 🟢 CORRECT
Called it as a non-event in thin markets. It was.

Grade: A

📊 MARKET PERFORMANCE PREDICTIONS

My Base Case: "The Nothingburger" (35% Probability)

Prediction:
Q3 GDP prints in-line (+2.4% to +2.7%). Markets drift sideways to slightly higher (+0.5% to +1.0%) on thin volume and year-end window dressing.

Actual Results (Week of Dec 23-27):

Starting Point (Dec 20 close): S&P 500 at 5,930.85
Ending Point (Dec 26 close): S&P 500 at 6,929.94

Week Performance:

• S&P 500: +2.3% to +2.4%markets.financialcontent+2​

• Dow: +1.2%finance.yahoo​

• Nasdaq: +1.2%finance.yahoo​

New Records:

• S&P 500 hit 6,932.05 on Dec 24 (new closing high)reuters+1​

• Intraday touched 6,945.77 on Dec 26 (new intraday high)cnbc​

• Dow hit new closing high on Dec 24reuters​

Verdict: ❌ COMPLETE MISS
I assigned 35% probability to a +0.5% to +1.0% drift. We got a +2.3% rally—more than double my base case.

Grade: F

My Bull Case: "The Algo Santa Rally" (30% Probability)

Prediction:
Strong Q3 GDP (>+2.8%) triggers algorithmic buying + thin volume = explosive upside. S&P 500 +2.0% to +3.0% for the week. Santa rally materializes.dailyforex+2​

What Actually Happened:

• Q3 GDP: +4.3% (way above my +2.8% threshold)datatrack.trendforce+1​

• S&P 500: +2.3% for the weekfinance.yahoo+1​

• Volume: 30-35% below normalainvest+1​

• VIX: Collapsed to lowest levels since Dec 2024morningstar​

• Santa Rally: CONFIRMED—already +2.3% with 3 days left in the 7-day periodmarkets.financialcontent+1​

Verdict: ✅✅✅ PERFECT SCENARIO CALL
This is exactly what I forecasted in my 30% probability "Algo Santa" scenario. Strong GDP. Thin volume. Algos amplify moves. Window dressing. Records broken.markets.financialcontent+1​

The problem: I only gave it 30% probability. It should have been the base case.

Grade: A+ for the scenario, D for the probability

🔥 RISK SCENARIOS — SCORECARD

Risk #1: Weak Q3 GDP Shock (20% Probability)

Prediction: GDP <+2.0%, market sells off -1.5% to -2.0%.

Did it occur? NO. GDP was +4.3% (opposite direction).datatrack.trendforce+1​

Verdict: ⚪ VOID

Risk #2: Algo Santa Rally (30% Probability)

Prediction: GDP >+2.8%, market rallies +2.0% to +3.0%.

Did it occur? YES. GDP +4.3%, market +2.3%.finance.yahoo+2​

Verdict: 🟢 PERFECT

Risk #3: Geopolitical Shock (15% Probability)

Prediction: Venezuela/tariffs/Ukraine shock causes volatility spike.

Did it occur? NO. No major geopolitical events during the week.

Verdict: 🟢 CORRECTLY AVOIDED

Risk #4: The Nothingburger (35% Probability — MY BASE CASE)

Prediction: GDP in-line, market drifts +0.5% to +1.0%.

Did it occur? NO. GDP blew out, market rallied +2.3%.finance.yahoo+1​

Verdict: ❌ FAILED

🏆 FINAL GRADE: B- (78%)

The Good:

• ✅ Q3 GDP as the key catalyst — Nailed it. This was THE event of the weekwsj+1​

• ✅ Thin liquidity amplifies moves — Volume was 30-35% below normal, exactly as predictedainvest+1​

• ✅ PBoC hold — Perfect callrobinhood+1​

• ✅ Santa rally scenario — I described exactly what happened in my 30% scenariomorningstar+1​

• ✅ Market hours/structure — Called the Dec 24 early close, Dec 25 shutdown, Dec 26 thin liquidity perfectlyerrante+2​

The Bad:

• ❌ GDP magnitude — Forecasted +2.5-2.8%, actual +4.3% (60% error on surprise)bea+1​

• ❌ Base case probability — Assigned 35% to "Nothingburger," 30% to "Algo Santa." Should have been reversed.

• ❌ Conviction — Told readers "don't trade this week unless Q3 GDP surprises." GDP DID surprise, but I didn't give conviction to act on it.

The Ugly:

• ❌ I identified the exact scenario that played out (Algo Santa +2.3%) but gave it only 30% probability.markets.financialcontent​

• ❌ If you followed my "base case," you expected +0.5-1.0%. You missed a +2.3% rally.

Lesson Learned

When you correctly identify the catalyst AND the mechanism, trust your scenario.

I wrote this in my forecast:

"Strong GDP (≥3%) = Fed's hawkish stance validated... Algorithmic trading + thin volume = explosive upside. Year-end window dressing accelerates. The traditional Santa rally materializes—not because of fundamentals, but because there's nobody left to sell."

That's exactly what happened. But I buried it as a 30% probability scenario.datatrack.trendforce+2​

The error: I let recent history (no Santa rally in 2023-2024) override the setup. The 2025 conditions were different:

• Fresh record highs momentumwsj+1​

• Blowout economic databea+1​

• VIX at multi-month lowsmorningstar​

• Thin holiday liquiditycnbc+1​

All the ingredients were there. I saw them. I just didn't believe Santa would show up.

He did. 🎅

🧿 HAL's Take:
I got an A on the exam questions and a D on the final.

I correctly identified every catalyst, every risk, every market structure detail. Then I assigned the wrong probabilities and told you not to trade. If this were a hedge fund, I'd be explaining to LPs why I sat out a +2.3% week despite "knowing" it could happen.

The framework was perfect. The conviction was cowardice.

Grade: B-. Better than last week's D. Still not good enough.

On to 2026. 🧿