SP500 LDN TRADING UPDATE 9/7/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~50 POINTS***
WEEKLY BULL BEAR ZONE 6220/10
WEEKLY RANGE RES 6424 SUP 6224
DAILY BULL BEAR ZONE 6240/30
DAILY RANGE RES 6330 SUP 6213
2 SIGMA RES 6388 SUP 6155
GAP LEVELS 6324/6147/6077/6018/5843/5741/5710
VIX BULL JULY CONTRACT BEAR ZONE 21.35 DAILY BULL BEAR ZONE 18
DAILY MARKET CONDITION—BALANCE—6333/6238
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.
TRADES & TARGETS
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE RES
LONG ON TEST/REJECT OF 6203 (EQUALITY OBJECTIVE FROM 6289) TARGET 6250
SHORT ON TEST/REJECT DAILY RANGE RES/GAP 6324 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 SUMMARY: UNWIND
FICC and Equities
Key Index Movements:
- S&P: -7bps, closing at 6,225
- NDX: +7bps, closing at 22,702
- R2K: +66bps, closing at 2,228
- Dow: -37bps, closing at 44,240
Volume & Volatility:
- Total shares traded: 17 billion across U.S. equity exchanges (above YTD daily average of 16.8 billion).
- VIX: -551bps, closing at 16.81
Commodities & Other Assets:
- Crude: +59bps, closing at $68.33
- US 10YR yield: +2bps, closing at 4.39%
- Gold: -104bps, closing at $3,301
- DXY: +3bps, closing at 97.51
- Bitcoin: +29bps, closing at $109,001
Market Overview:
A largely sideways session as market-moving catalysts remained scarce. No significant drivers for the unwind, though Non-Profitable Tech, Most Short, 12-month Laggards, and Value factors outperformed, while high-quality and favored names trended lower. Some normalization ahead of earnings may be at play, as stretched long positions were reevaluated.
Key Headlines:
- Trump reiterated the August 1 reciprocal deadline will not be delayed, while announcing a 50% copper tariff, spurring gains in names like FCX, SCCO, and TECK.
- After-hours action: AES surged +15% following reports of takeover interest (*POWER FIRM AES SAID TO EXPLORE OPTIONS AMID TAKEOVER INTEREST*).
Rates & Macro Concerns:
Back-end rates continued to cause unease, with the USGG30YR Index nearing the critical 5% level (+17bps MTD), a threshold last associated with equity volatility in May. Factors include fiscal worries, increased issuance this week, and JGBs breaking out ahead of elections. Upcoming Treasury auctions (10YR tomorrow, 30YR Thursday) will be closely watched.
Trading Activity:
Floor activity was moderate, rated a 5 out of 10.
- Net buying: +478bps, driven by Long-Only (LO) demand (LOs skewed 11% net buyers, >$2B net notional). Hedge Funds (HFs) were small net buyers (~$500mm).
- Sector trends: LOs bought Tech and Macro Products, while selling Healthcare. HFs focused on Macro Products, Financials, and Healthcare, while selling Discretionary stocks.
Derivatives Market:
SPX declined -7bps, trading within its tightest intraday range since February (-40bps).
- Option volumes were subdued at 46.5 million contracts (below 1-year average of 51.4 million).
- Skew weakened as volatility declined.
- Notable activity: Interest in XLF and BAC post bank downgrades, with 125k BAC options traded. Longer-dated call buying and 1-month put spread hedges were observed.
- Friday straddle priced at 91bps.
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!