SP500 LDN TRADING UPDATE 24/10/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! FOR CASH US500 EQUIVALENT LEVELS, SUBTRACT POINT DIFFERENCE***
WEEKLY BULL BEAR ZONE 6685/75
WEEKLY RANGE RES 6838 SUP 6566
OCT EOM STRADDLE 6602/6891
NOV MOPEX 6891/6399
DEC QOPEX 6303/7025
DAILY BALANCE 6690/6789
WEEKLY MARKET BALANCE - 6591/6809
MONTHLY ONE TIME FRAMING HIGHER 6371
DAILY BULL BEAR ZONE 6785/75
DAILY RANGE RES 6836 SUP 6720
2 SIGMA RES 6892 SUP 6662
VIX BULL BEAR ZONE 18.5
TRADES & TARGETS
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY/WEEKLY RANGE RES
SHORT ON TEST/REJECT DAILY/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 COLOUR: MO' SNAPBACK
Stocks closed higher today, with momentum broadly stabilizing across the board. GEV, VRT, and ORCL rebounded strongly, gaining 4-6% after being under pressure recently for “failing to rally on good news.” The market displayed healthy “risk-on” sentiment, with AI, momentum stocks, and gold all moving higher. Cyclicals outperformed defensives, volatility declined, and Quantum Computing (GSX1QNT1) surged 7% following reports of the White House engaging in talks for equity stakes. Investors are debating whether last week’s 2% pullback marked the bottom, as a busy earnings week looms with 43% of S&P 500 market cap set to report, including MSFT, GOOGL, and META on Wednesday, followed by AAPL and AMZN on Thursday.
Energy stocks saw a squeeze, driven by a 5%+ jump in front-month oil futures after new U.S. sanctions on Russian oil were announced overnight. The 10-year Treasury yield rose 4 basis points to hover near the key 4% level. Single-stock moves were largely aligned with fundamentals, a positive sign overall.
Weakness was observed in two key areas: 1) Alternatives, following BX’s 4% drop after earnings revealed a 1% miss on management fees despite otherwise fine KPIs. Long-only players defended the space, with most viewing the weakness as idiosyncratic rather than indicative of broader issues. 2) Managed Care, where MOH plunged 17% after a weak update, spotlighting a significant Q3 MLR miss in its Medicaid and Exchange businesses. This has reignited uncertainty in managed care names. Notably, Health Care remains one of the most net-bought sectors month-to-date, driven by long buys and short covering. Subsector performance varies, with Pharma and Life Sciences Tools & Services lagging, while Biotech net exposure has surged to 5-year highs, diverging sharply from the rest of the sector, which sits at 5-year lows year-to-date.
Market activity was moderate, scoring a 6 out of 10 in terms of overall levels. Our floor finished +513 basis points to buy versus a 30-day average of +7 basis points. Long-only investors were roughly flat, with supply in communication services offset by demand in financials. Hedge funds were net buyers, adding $1 billion across nearly every sector, with the largest concentrations in financials, energy, and macro products.
Looking ahead to tomorrow’s CPI data, GIR expects a 25-basis-point increase (versus the Street’s 30-basis-point consensus). Key components to watch include unchanged used car prices, a 30-basis-point rise in car insurance, a 150-basis-point decline in airfares (reflecting the fading impact of seasonal distortions), and a 7-basis-point upward push from tariffs on goods like communication, household furnishings, and recreation.
In derivatives, the desk favors short-volatility strategies heading into CPI. Last week’s dramatic vol squeeze has mostly unwound, but volatility levels remain elevated, with front-month VIX futures trading just below 20. The desk anticipates volatility underperforming on a rally as systematically sold vega strikes come into play. On the downside, a selloff may not trigger similar vol outperformance due to the distance from VIX settlement, limiting dealers’ short vol-of-vol exposure. Short gamma is also favored, despite the relatively low base into CPI. For those seeking protection, the desk suggests pairing short vol and short gamma with long skew, as skew has retraced to the middle of its post-Liberation Day range. A preferred trade is the year-end 6000-6900-7200 call spread collar, designed to capitalize on a potential volatility-dampened rally into year-end.
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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!