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SP500 LDN TRADING UPDATE 24/11/25
***QUOTING ES1 CONTRACT FOR CASH US500 EQUIVALENT LEVELS SUBTRACT POINTS DIFFERENCE***
***WEEKLY ACTION AREA VIDEO TO FOLLOW AHEAD OF NY OPEN***
WEEKLY BULL BEAR ZONE 6590/80
WEEKLY RANGE RES 6765 SUP 6475
NOV EOM STRADDLE 7054/6626
DEC QOPEX STRADDLE 7025/6303
The SPX aggregate gamma flip zone hovers around 6770, and we’re currently swimming in a sea of deep negative gamma, bringing heightened price volatility to the table. This week is expected to see low trading volume, with dealer hedging flows playing a significant role—similar to the 4th of July holiday week, where light trading occurred in a high positive gamma environment. However, the current situation is quite different as we’re in a deep negative gamma zone, which means market moves are being significantly magnified.
DAILY VWAP BULLISH 6615
WEEKLY VWAP BEARISH 6735
DAILY STRUCTURE – ONE TIME FRAMING LOWER - 6677
WEEKLY STRUCTURE – ONE TIME FRAMING LOWER - 6791
MONTHLY STRUCTURE – TBC EOM
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.
One-Time Framing Up (OTFU): This represents a market trend where each successive bar forms a higher low, signaling a strong and consistent upward movement.
One-Time Framing Down (OTFD): This describes a market trend where each successive bar forms a lower high, indicating a pronounced and steady downward movement.
GOLDMAN SACHS TRADING DESK VIEWS
SPX closed the week down ~1%, approximately 4% below its all-time high (ATH), buoyed by a Friday bounce. This rebound was driven by dovish comments from Fed’s Williams hinting at a near-term rate cut, Putin’s openness to peace talks in Ukraine, and reports of Trump’s team considering H200 sales to China (BBG). The market now prices a 65% probability of a December rate cut, up from 37% the previous day. ETF activity remains significant, accounting for 40% of trading volume, but S&P top-of-book liquidity continues to degrade, now at $2.9 million compared to a $11.5 million one-year average. This liquidity dynamic is amplifying market volatility in both directions. Short positions in US-listed ETFs increased by 4.6% yesterday, marking the largest percentage rise in a month and the fifth-largest year-to-date (YTD). On the week, long-only (LO) and hedge funds (HFs) were net sellers at -$3 billion and -$1 billion, respectively, with continued supply in tech duration assets, albeit at a slower pace. Notably, capital leaving tech appears to be rotating into other sectors, with healthcare (HC) remaining a standout.
Looking Ahead:
- Market Movement: S&P implied move for the upcoming holiday week is ~2%.
- Macro Data: Key releases include US retail sales, PPI, and home prices for September (Tuesday) and the Beige Book (Wednesday).
- Earnings: Notable reports include A, KEYS, ZM (Monday); ADI, ANF, BABA, BBY, BURL, DKS, KSS, SJM (Tuesday); ADSK, DELL, HPQ, NTAP, URBN, WDAY, ZS (Tuesday); and DE (Wednesday).
- Fed: The Fed enters its blackout period on Friday, November 29.
Prime Brokerage Update:
- Risk Exposures: US fundamental long/short (L/S) gross leverage fell 2.6 points to 214.1% (82nd percentile one-year), while net leverage rose 0.4 points to 52.9% (63rd percentile one-year). The L/S ratio increased 1% to 1.657 (56th percentile one-year).
- Hedge Fund Flows (Nov 14–20): HFs were net buyers of US equities for the third consecutive week, with gross trading activity in single stocks rising, driven by long buys outpacing short sales.
Sector Trends:
- Rotation: Flows indicate rotation into healthcare, materials, and discretionary sectors, while tech and staples saw outflows.
- Tech: The NDX fell over 2% for the week, breaking below its 50-day moving average (DMA) and testing its 100-DMA. Market concerns center on GenAI (costs, returns, execution), macro uncertainties (rate cuts), and technical factors (volatility, crypto, year-end positioning). Despite this, the NDX remains up ~15% YTD. While AI-related themes struggle to stabilize, fundamental data remains robust (e.g., AI infrastructure demand, INTU’s upbeat results, Walmart’s consumer insights). Investors are cautious about adding exposure amid significant volatility in key names like NVDA. Upcoming catalysts include earnings from ZM, WDAY, ZS, DELL, and ADI, alongside macro data (retail sales, PPI) and the start of the holiday shopping season.
- Consumer: Consumer stocks outperformed, driven by strong earnings from names like WMT, GAP, ROST, LOW, TJX, and AS, despite some softness in October. Companies like WMT and LOW noted a stronger start to November. Upcoming earnings are expected to deliver beats, including BBY, BURL, DKS, and URBN.
- Healthcare: The sector continued its strong performance, recovering from earlier underperformance. Key drivers included favorable updates from diagnostics (EXAS-ABT M&A), biopharma (Roche’s positive lidERA readout, MRK’s CADENCE trial results), and medtech. While LO-led de-grossing in medtech has slowed, intra-sector rotations persist.
- Financials: Confusion persisted over broader market weakness, attributed to hawkish Fed commentary, PnL protection, and macro concerns. Despite this, banks showed resilience, and defensive flows dominated. Select names like XYZ stood out due to multi-year growth stories.
- Energy: Elevated interest in power-related names continues amidst sell-offs in IPPs, energy systems, nuclear, cleantech, and battery storage. Announcements from CAT and ENR regarding gas turbine capacity raised concerns about market share erosion for generation names.
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.
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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!