SP500 LDN TRADING UPDATE 25/9/25
FYI WILL BE OFFLINE UNTIL LDN OPEN 29 SEP - I REMAIN SHORT FROM 6745 WITH A TRAILING STOP AT 6645 & WILL LOOK TO ADD SHORTS AS PER PLAN BELOW
WEEKLY & DAILY LEVELS
***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~61 POINTS***
WEEKLY BULL BEAR ZONE 6600/6590
WEEKLY RANGE RES 6734 SUP 6595
SEP EOM STRADDLE 178 POINTS - 6282/6638
OCT MOPEX 6842/6487
DEC QOPEX 6303/7025
DAILY ONE TIME FRAMING DOWN -6728
DAILY BULL BEAR ZONE 6720/30
DAILY RANGE RES 6755 SUP 6639
2 SIGMA RES 6816 SUP 6576
VIX DAILY BULL BEAR ZONE 18
TRADES & TARGETS
SHORT ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE SUP
LONG ON TEST/REJECT OF DAILY RANGE SUP TARGET DAILY BULL BEAR ZONE
LONG ON TEST OF WEEKLY RANGE SUP TARGET DAILY RANGE SUP
(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
Market Overview
S&P 500 Performance
The S&P 500 closed down by 28 basis points at 6,637, with a market-on-close (MOC) buying imbalance of $2.8 billion. The NASDAQ (NDX) fell 31 basis points, settling at 24,503, while the Russell 2000 (R2K) dropped 92 basis points to 2,434. The Dow Jones Industrial Average decreased by 37 basis points, closing at 46,121. A total of 18.1 billion shares were traded across all U.S. equity exchanges, surpassing the year-to-date daily average of 16.8 billion shares.
Volatility and Commodities
The VIX index decreased by 276 basis points to 16.18, indicating a drop in market volatility. WTI Crude oil rose by 221 basis points to $64.81, while the U.S. 10-year Treasury yield increased by 4 basis points to 4.14%. Gold saw a decline of 85 basis points, priced at $3,732. The U.S. Dollar Index (DXY) rose by 63 basis points to 97.87, and Bitcoin increased by 143 basis points, trading at $113,600.
Market Sentiment
The session was quieter as markets searched for the next big catalyst following Micron Technology's earnings report. Selling pressure was notably evident among technology heavyweights such as Apple, NVIDIA, Palantir, Netflix, Google, and Micron, contributing significantly to the NDX's decline.
Sector Highlights
On the positive side, the China vs. U.S. Internet sector (GSPRUCIT) rose by 400 basis points, and AI Power vs. AI Hardware (GSPUAIPO) increased by 182 basis points. Conversely, high beta momentum stocks (GSPRHIMO) fell by 400 basis points, while 12-month winners (GSXUHMOM) dropped by 330 basis points.
AI Sector Focus
AI remained a central theme as markets reassessed spending, costs, and demand sustainability following Micron's earnings report. Despite solid results and a strong forward guide, Micron was one of the worst performers in the S&P 500. In contrast, Alibaba reported a strong quarter and announced plans to ramp up AI spending beyond its original target of 380 billion yuan ($53 billion), leading to an 8.25% increase in its stock price. This price action suggests a persistent appetite for AI investments, albeit at lower valuation points. China appears to be a more attractive option from a valuation perspective, supported by strong demand in thematic flows.
Company Updates
Freeport-McMoRan (FCX) warned that production at PT Freeport Indonesia in 2026 could be approximately 35% lower than previous estimates due to required repairs. The stock closed down 17%, drawing significant attention with over 7.5 million shares traded.
Market Outlook
Looking ahead, there are expectations for MOC sell imbalances as month-end approaches. Estimates suggest U.S. pensions may sell approximately $21 billion of U.S. equities, which ranks in the 89th percentile among all buy and sell estimates over the past three years.
Equity Capital Markets (ECM) Update
Year-to-date, U.S. registered equity issuance stands at $147.3 billion, compared to $133.1 billion at this time last year. Within this total, $32.6 billion has been raised through U.S. IPOs (excluding SPACs), compared to $27.4 billion last year. Notably, 25% of this year's IPO activity occurred in September. A surge in activity is anticipated as October approaches.
Flow Analysis
The market finished with a net buying demand of over $2.5 billion, with the floor closing 440 basis points better to buy. Most of this demand came from long-only (LO) investors, who net bought close to $1 billion, primarily in Financials, Discretionary, and Macro Products. Hedge funds (HFs) were generally better for sale, particularly in Industrials, Tech, and Macro Products.
Derivatives Insights
There is a noticeable relaxation of volatility across the index options market, primarily at the front of the curve. Flows remain tilted towards buyers of term structures, although the muted realized moves have caused volatility to show a slight decline for the first time in two weeks. Directional flows have leaned towards monetizing puts following yesterday's selloff.
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!