SP500 LDN TRADING UPDATE 2/9/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~10 POINTS***
WEEKLY BULL BEAR ZONE 6420/10
WEEKLY RANGE RES 6554 SUP 6392
DAILY BULL BEAR ZONE 6450/40
DAILY RANGE RES 6534 SUP 6413
2 SIGMA RES 6594 SUP 6354
VIX DAILY BULL BEAR ZONE 17.25
DAILY MARKET CONDITION - BALANCE 6523/6444
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 favouring fade trades at the range extremes (highs/lows) while preparing for potential breakout scenarios if the balance shifts.
TRADES & TARGETS
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE RES
SHORT ON TEST/REJECT DAILY RANGE RES TARGET 6520
SHORT ON ACCEPTANCE BELOW DAILY BULL BEAR ZONE TARGET WEEKLY 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
GOLDMAN SACHS FICC AND EQUITIES
TACTICAL FUND FLOWS
GS Flow of Funds: Back to School
As September begins, the "Back to School" season signals a return to work and market activity. Below is the technical checklist for this month:
September is historically the weakest month of the year, with late September marking the worst two-week stretch. Systematic demand has faded, removing a critical layer of market support. Institutions have been net sellers of U.S. equities for two consecutive months and are cautiously positioned for September. However, positioning remains modest relative to historical levels, which should keep market dips relatively shallow unless there are fundamental shocks.
Low correlation and dealers holding long gamma positions are expected to keep index-level movements muted for now. This month is likely to be challenging, driven by active stock-picking at the institutional level, while retail investors continue to allocate funds into passive investment vehicles.
Recommendation:
We favor QQQ 1-month 98-88% put spreads to hedge against market downside (10x1 payout). As of Friday’s close (ref: 570.40), the strategy costs 98 basis points.
- Buy: 1x -32 delta, 18.48 implied volatility
- Sell: 1x -5 delta, 28.65 implied volatility
- Breakeven: $553.418 (-2.977%) .
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!