#SP500 LDN TRADING UPDATE 17/01/25
WEEKLY BULL BEAR ZONE 5905/15
WEEKLY RANGE RES 5983 SUP 5745
DAILY BULL BEAR ZONE 5950/40
DAILY RANGE RES 6011 RANGE SUP 5928
TODAY'S TRADE LEVELS & TARGETS
LONG ON ACCEPTANCE ABOVE DAILY RANGE RES TARGET 6030>6056
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE RES
SHORT ON ACCEPTANCE BELOW DAILY BULL BEAR ZONE TARGET DAILY RANGE SUP> 5909 GAP FILL
TO REVIEW WEEKLY ACTION AREAS & PRICE OBJECTIVE VIDEO CLCIK HERE
GOLDMAN SACHS TRADING DESK VIEWS
U.S. EQUITIES UPDATE: REASSESSMENT FICC and Equities | 16 January 2025 | 9:40PM UTC P
21bps closing at 5937 with a MOC of $400mm to BUY. NDX 69bps at 21091, R2K +15bps at 2266 and Dow 16bps at 43153. 14.33bn shares exchanged across all US equity markets compared to a year-to-date daily average of 16b shares. VIX +285bps at 16.59, Crude 175bps at 78.64, US 10 yr bps at 4.61, gold +66bps at 2714, dxy 10bps at 108.98 and bitcoin +54bps at 100220. It was another challenging day (consider: Semicap, UBER, SMID Software up) as investors adjust to the rate volatility that has returned to the market (10yr yields appear ‘set’ for around 5% on Monday .. now closer to about 4.5%) while the mag7 weighed on the market. S&P equal weight ended up +80bps. AAPL declined 4% (its worst day since August) due to a combination of industry data (China / Canalys) and TSM discussing 1Q smartphone seasonality – but neither data point felt particularly ‘new’ or surprising). The stock fell below the 100dma and is now 12.33% off the peaks (200dma is 216.71). In other news, financial earnings remain robust, but today’s results didn’t meet the higher expectations set yesterday ex MS (think: PNC, MTB, FHN, SNV...BAC crowded long). Tomorrow, we’ll be monitoring US industrial production and earnings before the market opens (CFG, FAST, HB AN, RF, SLB, STT, TFC). Our floor rated a 6 on a 1 10 scale regarding overall activity levels. The floor concluded with just over +$1B in net demand. Both HF and LO activity increased today, with HFs selling macro products (short ratios remain notably high, around ~70% across the ETF space today). HFs purchased Fins + Tech. LOs were net sellers of Comms Svcs, + Discretionary, while buying Macro Products.
DERIVATIVES:
Volatility decreased slightly today as we continue to observe buyers of VIX calls / call spreads following yesterday’s S&P rally. The desk also noted interest from China in KWEB / FXI, along with sellers of ASHR calls tied to stock to short volatility in anticipation of a cooling in China speculation in the upcoming months. For tomorrow, we estimate that $4.3 trillion of notional options exposure will expire, marking the largest January expiry on record. We expect this to further clean up the market and keep dealer gamma positioning minimal, as dealers were long approximately 1.5bn of S&P gamma heading into today. The straddle for Friday PM is set at 0.65% = circa 38 point range
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!