SP500 LDN TRADING UPDATE 30/04/25
WEEKLY & DAILY LEVELS
WEEKLY BULL BEAR ZONE 5482/92
WEEKLY RANGE RES 5700 SUP 5400
DAILY BULL BEAR ZONE 5505/15
DAILY RANGE RES 5603 SUP 5485
2 SIGMA RES 5845 SUP 5245
5610 - 5339 GAP LEVELS
(QUOTING FRONT MONTH EMINI SP500 FUTURES CONTRACT PRICES, FOR EQUIVALENT US500 LEVELS – 30 POINTS)
WEEKLY ACTION AREA VIDEO https://www.youtube.com/watch?v=ZrfpPpegL-k&t=80s
TRADES & TARGETS
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE RES
SHORT ON TEST REJECT 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: FLAT PERFORMANCE
FICC and Equities | April 28, 2025 | 8:39 PM UTC
- S&P 500: +6 basis points, closing at 5,528 with a Market on Close (MOC) buy order of $3.4 billion.
- Nasdaq 100 (NDX): -3 basis points at 19,427.
- Russell 2000 (R2K): +42 basis points at 1,965.
- Dow Jones: +28 basis points at 40,227.
- Volume: 17 billion shares traded across U.S. exchanges, above the year-to-date daily average of 16.3 billion shares.
- Volatility Index (VIX): +113 basis points at 25.12.
- Crude Oil: -170 basis points at $61.90.
- U.S. 10-Year Treasury Yield: -2 basis points at 4.21%.
- Gold: +191 basis points at 3,361.
- Dollar Index (DXY): -54 basis points at 98.93.
- Bitcoin: +36 basis points at $94,620.
Market sentiment was "aggressively unchanged" amidst a defensive and volatile trading day, influenced by several factors: a report from semianalysis.com on a slowdown in Microsoft's data center construction, social media buzz around DeepSeek's new R2 model release, and a Wall Street Journal report on Huawei's development of a new AI chip aiming to compete with NVIDIA (which closed down 2%). Trading volumes were down 20-30%, indicating potential market fatigue and anticipation of a busy week with significant tech earnings reports.
Fund Flows:
- Goldman Sachs Prime Brokerage: Gross exposure remains high (81st percentile for 1 year; 94th for 3 years), while net exposure is low (5th percentile for 1 year; 53rd for 3 years).
- Buybacks: Approximately 40% of S&P 500 companies are out of blackout periods, expected to reach 65% by the end of the week. The corporate repurchase window from April to May is historically strong, accounting for 20% of annual execution.
- CTAs: Anticipate $3 billion in S&P 500 purchases in a flat market this week.
- Pension Rebalancing: Expected to buy $4 billion in U.S. equities by month-end.
Trading activity was rated a 4 out of 10, with investors largely inactive. The floor finished near flat compared to a 30-day average of -26 basis points. Long-only funds ended as net sellers by $700 million, driven by macro trends in tech, while hedge funds were net sellers by $800 million across various sectors. The Federal Reserve is currently in blackout, shifting focus to micro data with 40% of S&P market cap reporting this week, including Microsoft (Wednesday), Amazon (Thursday), and Apple (Thursday).
Derivatives:
- Volatility was bid during the morning selloff, with clients adding short-dated downside protection in SPX/SPY, QQQ, and IWM ahead of a catalyst-heavy week. Investor sentiment turned bearish as optimism about a China trade deal faded. Significant hedge rolls occurred, with $6 million/$7 million vega rolled in QQQ and SPY, respectively. As the market rallied in the afternoon, trading flows were quiet, and volatility bids compressed.
- Focus remains on Mag7 earnings, with the group up 7.9% last week on better-than-expected results. Key earnings to watch include Microsoft and Meta on Wednesday, and Apple and Amazon on Thursday. Jobs data is also in focus, with GIR's non-farm payroll estimate at +140k versus the street's +130k.
- For vanilla hedges, our desk recommends owning SPX 1-month puts outright. May 16, 2025, 30 delta puts cost only 1.1% (-2.7% lower from current levels) and have a ~24 volatility, which appears low. The straddle for the rest of the week is ~2.27%.
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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!