SP500 LDN TRADING UPDATE 4/06/25
WEEKLY & DAILY LEVELS
WEEKLY ACTION AREA & PRICE TARGET VIDEO - https://www.youtube.com/watch?v=35xAmx3SxDA&t=9s
WEEKLY BULL BEAR ZONE 5795/5805
WEEKLY RANGE RES 6020 SUP 5805
DAILY BULL BEAR ZONE 5945/55
DAILY RANGE RES 6040 SUP 5920
2 SIGMA RES 6100 SUP 5860
GAP LEVELS 5843/5741/5710
VIX BULL BEAR ZONE 19.25
DAILY MARKET CONDITION - ONE TIME FRAMING UP ENDS 5938
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
(QUOTING FRONT MONTH EMINI SP500 FUTURES CONTRACT PRICES, FOR EQUIVALENT US500 LEVELS SUBTRACT CIRCA 7 POINTS)
TRADES & TARGETS
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE RES
SHORT ON TEST/REJECT OF 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: STRONG GAINS
FICC and Equities | 3 June 2025 | 8:26 PM UTC
- S&P 500: +58bps, closing at 5,970 with MOC of $380mm to SELL.
- Nasdaq 100 (NDX): +79bps, closing at 21,662.
- Russell 2000 (R2K): +159bps, ending at 2,106.
- Dow Jones: +51bps, finishing at 42,519.
- Volume: 15.7b shares traded across U.S. equity exchanges vs YTD daily average of 16.6b shares.
- VIX: -365bps, closing at 17.69.
- Crude Oil: +130bps, ending at $63.34.
- U.S. 10-Year Yield: Unchanged at 4.43%.
- Gold: -60bps, closing at $3,367.
- DXY (Dollar Index): +57bps, ending at 99.27.
- Bitcoin: +105bps, reaching $106,014.
MARKET DRIVERS
The AI sector propelled equities higher today, supported by several positive developments:
- Credo Technology (CRDO) surged +25% after a strong earnings beat and guidance raise.
- META and Constellation Energy (CEG) announced a nuclear power partnership, though CEG faded late in the session.
- ON Semiconductor (ON) gained +11% intraday following a favorable conference appearance.
A stronger-than-expected JOLTs report eased concerns ahead of Friday's NFP (GIR forecast: +125k), spurring retail engagement and driving beta shorts up +3%. However, our HF Long Basket underperformed the GS Prime High Volatility Short Basket by -218bps.
INSIGHTS FROM PETER BARTLETT
Recent momentum in AI sentiment has been fueled by:
1. Key developments over the past two weeks (e.g., GOOGL’s I/O, NVDA earnings, META’s AI ad product).
2. Upcoming catalysts like AVGO earnings on Thursday.
3. Positive sell-side notes, including a widely-discussed 300+ page AI report by Mary Meeker over the weekend.
Constructive flows have been observed across the AI space, particularly since NVDA's strong earnings report. Activity levels on our floor were rated a 5/10 today. Performance details:
- Floor: -4%, significantly below the 30-day average of +26bps.
- Long-Only (LOs): Net sellers of -$2b, driven by tech, healthcare, and consumer sectors.
- Hedge Funds (HFs): Net buyers of +$400m, with scattered covering across sectors.
POST-CLOSE UPDATES
- CrowdStrike (CRWD): -7% after FY revenue guidance was only reiterated. Announced a $1b buyback.
DERIVATIVES COMMENTARY
Equities saw a slow grind higher as volatility declined slightly and skew flattened significantly. Key observations:
- Index Activity: Rising demand for IWM upside amid optimism around trade policy. IWM is trading near its 100-day moving average and serves as a hedge to long-quality portfolios.
- FXI Calls: Attractive for a potential relief rally post the Trump-Xi meeting. The 36 calls are priced at ~30 cents (39d).
- Single-Stock Options: Clients positioned for GOOGL upside following news of Apple’s plans to adopt Perplexity as an alternative to Google Search for iPhones. With much negativity already priced in, call spreads and call spread collars out to August are favored.
WEEKLY OUTLOOK
The weekly straddle is priced at 1.23%, reflecting moderate expectations for volatility through the rest of the week.
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!