Will the bull hold S&P 500 at 6,800?

6,800 is a critical but not fragile level.

The index is entering quadruple witching with an unusually large options overhang. This typically amplifies intraday volatility, but does not automatically reverse the trend.

Positioning data suggests large dealer gamma clustered between ~6,750–6,850. As long as price stays within this zone, dealers are more likely to dampen downside moves through hedging flows.

A clean break below 6,750 would matter. Above 6,800, the path of least resistance remains sideways to higher.

Base case: 6,800 holds into expiry unless macro shocks emerge.

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How much does the BOJ rate hike matter for US stocks?

Direct impact is modest. Indirect impact is real but gradual.

Why the immediate effect is limited

The hike from 0.5% to 0.75% was fully priced in.

Japanese policy rates remain extremely low relative to US yields.

US equities typically react more to Fed policy and US liquidity conditions than to BOJ actions.

Where the risk lies

The longer-term concern is yen carry trade unwind.

Higher Japanese rates reduce incentives to fund risk assets with cheap yen.

However, this unwind tends to be slow and episodic, not a one-night event.

Net effect on US equities:

Short term: marginal.

Medium term: slightly negative for leveraged risk trades, especially high-beta tech.

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Can the Santa Rally be assured tonight?

Not assured, but statistically favoured.

Supporting factors:

December seasonality remains positive.

Fund managers are still underweight equities relative to benchmarks.

Post-expiry flows often reduce hedging pressure, allowing prices to drift higher.

Headwinds:

Elevated valuations.

High sensitivity to macro headlines.

Quadruple witching can distort price action intraday.

Most likely outcome:

Choppy session with sharp swings, followed by stabilisation rather than a straight melt-up.

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Bottom line

6,800 is defendable, but expect volatility around it.

BOJ’s hike is not a US equity derailment, more a background liquidity shift.

Santa rally is probable, not guaranteed, and likely delayed rather than cancelled.