SP500 LDN TRADING UPDATE 03/04/25
WEEKLY & DAILY LEVELS
WEEKLY BULL BEAR ZONE 5550/60
WEEKLY RANGE RES 5746 SUP 5458
DAILY BULL BEAR ZONE 5580/90
DAILY RANGE RES 5627 SUP 5541
2 SIGMA DAILY RES 5726 SUP 5442
(QUOTING FRONT MONTH EMINI SP500 FUTURES CONTRACT PRICES, FOR EQUIVALENT US500 LEVELS – -40 POINTS)
TRADES & TARGETS
LONG ON TEST/REJECT OF WEEKLY RANGE SUP TARGET 5584.50
LONG ON ACCEPTANCE ABOVE DAILY BB ZONE TARGET DAILY RANGE RES
SHORT ON TEST/REJECT DAILY 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: "KIND" TARIFFS
FICC and Equities | 2 April 2025
Market Performance:
- S&P 500: +67bps, closing at 5,670 with MOC flows totaling $1.5B to BUY.
- Nasdaq 100 (NDX): +75bps, ending at 19,581.
- Russell 2000 (R2K): +157bps, closing at 1,988.
- Dow Jones: +56bps, finishing at 42,225.
A total of 16.2 billion shares traded across U.S. equity exchanges, surpassing the YTD daily average of 15.4 billion shares.
Key Indicators:
- VIX: -119bps, closing at 21.51.
- Crude Oil: +17bps, ending at $71.35.
- U.S. 10-Year Yield: -4bps, at 4.12%.
- Gold: +147bps, closing at $3,191.
- DXY: -41bps, at 103.83.
- Bitcoin: -1bp, finishing at $85,299.
Session Overview:
A quiet trading session as investors awaited this afternoon's scheduled tariff announcement, which remained the focal point. Activity levels on the floor were rated a 3 out of 10, with investors largely frozen. However, the floor finished +600bps versus the 30-day average of -157bps. Long-only (LO) and hedge fund (HF) managers were slight net buyers, with "squeezy pockets" leading gains.
Post-market action showed indigestion, with the S&P and Nasdaq sinking over 2% following President Trump's announcement: "RECIPROCAL RATE WILL BE HALF THEIR TARIFF RATE" with a minimum baseline tariff of 10% across the board. This baseline begins at midnight tonight, while higher reciprocal rates will be implemented starting April 9.
Notable Positive: Canada and Mexico are excluded from reciprocal tariffs, for now.
Key Levels to Watch:
- S&P intra-day low: 5,488.
- S&P closing low: 5,521.
Tomorrow’s focus will include Eurozone services PMI & PPI for February, U.S. services ISM, jobless claims, and earnings reports (pre-market: AYI, CAG, LW, MSM; post-market: GES).
Derivatives Update:
A subdued session heading into the tariff announcement saw flows primarily centered on unwinding and monetizing hedges rather than adding new risk. Macro-focused clients showed demand today, stepping in to buy May-expiry upside. Long/short managers also purchased weekly calls to hedge short positions that faced squeezes.
The desk notes a significant gamma shift following yesterday's $4B swing, anticipating increased dealer length on any rally before hitting support levels. Despite modest realized moves, the intraday range was ~2.20%, marking the third consecutive day above 150bps. As of today’s close, SPX straddles for the remainder of the week (including NFP) are pricing in a breakeven move of 2.0%.
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Past performance is not indicative of future results.
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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!