SP500 LDN TRADING UPDATE 14/10/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~60 POINTS***
WEEKLY BULL BEAR ZONE 6750/60
WEEKLY RANGE RES 6693 SUP 6411
OCT EOM STRADDLE 6602/6891
OCT MOPEX 6842/6487
DEC QOPEX 6303/7025
DAILY MARKET STRUCTURE – ONE TIME FRAMING LOWER 6711
DAILY BULL BEAR ZONE 6630/20
DAILY RANGE RES 6748 SUP 6631
2 SIGMA RES 6808 SUP 6572
VIX DAILY BULL BEAR ZONE 18.75
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 COLOR: SNAPBACK” note from Goldman Sachs (dated October 13, 2025):
Market Recap
Major Index Moves (Monday, Oct 13):
S&P 500: +1.56% (closed at 6,654) — $2bn to buy at Market On Close (MOC)
NASDAQ 100 (NDX): +2.18% (24,750)
Russell 2000 (R2K): +2.79% (2,461)
Dow Jones: +1.29% (46,067)
Volume: 18.3bn shares traded (above YTD avg of 17.1bn)
Volatility (VIX): -12% at 19.03 (lower volatility)
Commodities & FX:
WTI Crude: +1.34% ($59.69)
Gold: +3.19% ($4,128)
USD Index (DXY): +0.29% (99.27)
Bitcoin: +0.50% ($115,600)
Key Drivers
Trade War Sentiment: Stocks rebounded after Friday’s sell-off, as Trump softened rhetoric on China. VP Vance indicated Beijing was acting “reasonably.”
Sector Moves: Rare Earths surged (+18%, 4.7 sigma move), plus sharp reversals in sectors hit hardest Friday (robotics, AI, crypto, momentum).
Implied Volatility: S&P implied move through Friday (Oct 17) is 2.25%.
Earnings Season: Kicks off tomorrow; expectations are low, which could support markets if results are “okay.”
Flow & Positioning
Floor Activity: Quieter due to quasi-holiday; activity level scored 4/10. Floor finished +1.59% to buy (vs 30-day avg of +0.51%).
Single Stocks:
OPENAI & BROADCOM: Announced custom data center chips for 2026; AVGO +10%, ANET -5% (competition fears).
Consumer Sector: Excess volatility due to updated data feeds; names like DKS, BBY, BURL, FIVE rebounded.
Gamma Dynamics:
Dealers’ long gamma dropped from ~$9bn to ~$4bn Friday, largest single-day drop in 3+ years.
Impact: Less dealer hedging means less dampening of volatility. Dealers are still long gamma, just less so.
CTA & Trend Models: S&P short-term momentum now negative; other trend signals neutral but not negative.
Flow Estimates (next week):
Flat tape: -$6bn to SELL
Up big: -$1.5bn to SELL
Down big: -$42bn to SELL
SPX Key Levels: 6578 / 6292 / 5876
Sentiment & Performance
US Sentiment Indicator: Flipped positive (+0.3) after 31 weeks negative.
GS Prime Brokerage Data (Friday):
Fundamental L/S managers: -1.27% (alpha flat), -0.5% MTD, +11.6% YTD.
Systematic L/S managers: +0.55%, -0.8% MTD, +12.3% YTD.
Global Flows: Largest 1-day net selling since April 3 (-2.9 z score); driven by shorts, all regions net sold (NA, Asia).
Takeaways
Snapback Rally: Most of Friday’s losses reversed, driven by softer trade war rhetoric and sector reversals.
Volatility: Dealer gamma reduction means volatility could pick up if market moves sharply.
Earnings: Low bar could support equities if companies meet or beat expectations.
Sentiment: First positive flip in over half a year—a potential tailwind.
Flows: Watch for further selling pressure if momentum turns more negative.
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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!