SP500 LDN TRADING UPDATE 5/8/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~25 POINTS***
WEEKLY BULL BEAR ZONE 6220/30
WEEKLY RANGE RES 6400 SUP 6130
DAILY BULL BEAR ZONE 6330/40
DAILY RANGE RES 6428 SUP 6310
2 SIGMA RES 6487 SUP 6251
GAP LEVELS 6265/6147/6077/6018/5843/5741/5710
VIX DAILY BULL BEAR ZONE 18.50
DAILY MARKET CONDITION -BALANCE 6358/6239
Balance: This refers to a market condition where prices move within a defined range, reflecting uncertainty as participants await further market-generated information. Our approach to balance includes favoring fade trades at the range extremes (highs/lows) while preparing for potential breakout scenarios if the balance shifts
TRADES & TARGETS
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET WEEKLY RANGE RES
SHORT ON TEST/REJECT WEEKLY RANGE RES TARGET DAILY BULL BEAR ZONE
(I FADE TESTS OF 2 SIGMA LEVELS ESPECIALLY INTO THE FINAL HOUR OF THE NY CASH SESSION AS 90% OF THE TIME WHEN TESTED THE MARKET WILL CLOSE AT OR BELOW THESE LEVELS)
GOLDMAN SACHS TRADING DESK VIEWS
U.S. EQUITIES UPDATE: DIP BOUGHT
FICC and Equities | August 4, 2025 |
Market Performance:
- S&P 500: +147bps, closing at 6,329 with $1.1b MOC to BUY.
- Nasdaq 100 (NDX): +187bps, closing at 23,187.
- Russell 2000 (R2K): +242bps, closing at 2,225.
- Dow Jones: +134bps, closing at 44,173.
Trading Volume & Volatility:
- Total shares traded: 15.2b across all U.S. equity exchanges (vs YTD daily avg of 16.8b).
- VIX: -14bps, closing at 17.52.
Commodities & Rates:
- Crude Oil: -175bps, closing at $66.15.
- U.S. 10-Year Yield: -2bps, closing at 4.19%.
- Gold: +84bps, closing at $3,328.
- DXY (Dollar Index): -40bps, closing at 98.74.
- Bitcoin: +43bps, closing at $114,897.
Market Insights:
Today saw a strong "buy the dip" rally, particularly in AI-related stocks like NVDA and AVGO, which gained over 3%. Every sector was higher except energy. Momentum has recovered most of July’s losses and is tracking for its best 5-day stretch since late August. Key dynamics to monitor:
1. Buybacks: 72% of companies are in open windows.
2. CTA Demand: Starting to fade.
3. Seasonality: August’s first two weeks historically act as a drag.
After-Hours Update:
PLTR surged +9% post-market (+14% intraday) following a beat-and-raise report and citing "Astonishing AI Impact."
Floor Activity:
Activity levels were moderate, rated 3/10 overall. Floor finished +6% to buy vs a 20-day average of +36bps. Client activity remained muted. Long-Only (LO) accounts were net buyers ($3b), driven by macro products, tech, and healthcare. Hedge Funds (HFs) were balanced, with discretionary and tech supply offset by macro product demand.
Macro Outlook:
Tomorrow, ISM Services Index is estimated to rise by 1.2pts to 52.0 for July, indicating sequential improvement (+1.9pts to 53.2 in our non-manufacturing tracker) but facing residual seasonality challenges. We continue to expect three consecutive 25bp rate cuts in September, October, and December, with two additional cuts in H1 2026. However, a delay could occur if reports show significant price hikes or labor market rebounds. Conversely, a 50bp cut in September is possible if unemployment rises or jobless claims increase.
Derivatives Market:
Volatility markets showed normalization alongside spot markets. Fixed strike vol changes on a 2-day basis were down at the back of the curve, with only slight increases (+0.1 to +0.2v) in September and October vol despite consecutive realized moves. Skew remains slightly bid but has normalized from Friday’s heightened stress levels. Customers were quiet overall, with a tilt toward short-dated downside ownership. Tomorrow’s straddle is priced at 50bps.
Sector Strategy:
Our baskets team recommends shorting Cyclicals vs Defensives (GSPUCYDE Index).
1. The index reached all-time highs twice in 2025, pricing in economic growth not currently evident.
2. Valuation has recovered to pre-Liberation Day highs, driven by expensive cyclicals and discounted defensives.
3. A correction in this pair could imply a 14-21pp drawdown considering the current macro environment.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!