SP500 LDN TRADING UPDATE 18/03/25
(PLEASE NOTE ALL LEVELS ARE NOW QUOTED IN THE JUNE CONTRACT M25 FOR US500 LEVELS SUBTRACT 54 POINTS.)
WEEKLY & DAILY LEVELS
WEEKLY BULL BEAR ZONE 5650/60
WEEKLY RANGE RES 5850 SUP 5550
DAILY BULL BEAR ZONE 5670/80
DAILY RANGE RES 5776 SUP 5688
TODAY'S TRADES & TARGETS
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE RES>WEEKLY RANGE RES
SHORT ON TEST/REJECT OF DAILY RANGE RES TARGET DAILY BULL BEAR ZONE>DAILY RANGE SUP
LONG ON TEST/REJECT OF WEEKLY BULL BEAR ZONE TARGET DAILY RANGE RES>WEEKLY RANGE RES
GOLDMAN SACHS TRADING DESK VIEWS
U.S. EQUITIES: MUNDANE DAY
**FICC and Equities | March 17, 2025 |
- S&P 500: +64bps, closing at 5,572 with $200M MOC to sell.
- NASDAQ 100 (NDX): +55bps, closing at 19,812.
- Russell 2000 (R2K): +106bps, closing at 2,082.
- Dow Jones: +85bps, ending at 41,841.
Volume: 13.8B shares traded across U.S. equity exchanges, below the YTD daily average of 15.3B.
Volatility Index (VIX): -5.8%, closing at 20.51.
Commodities: Crude +45bps at $67.49; Gold +28bps at $3,009.
Rates: U.S. 10-Year Treasury -2bps at 4.29%.
Currency: DXY -31bps at 103.39.
Crypto: Bitcoin +1.3%, closing at $84,479.
### Market Dynamics: A Mixed Day
Today’s session had a somewhat defensive tone with pockets of short squeezes, yet it felt like the first “normal” trading day in over two weeks. Better-than-expected retail sales drove outperformance in cyclically-leveraged sectors, with the S&P Equal Weight index outperforming by ~70bps. Hedge funds (HFs) showed constructive, albeit muted, activity as volumes were down over 20%. HFs appear to be regaining confidence, while asset manager supply slowed, with some pair trades emerging instead of outright sales—a positive indicator. Non-fundamental activity is decelerating, with CTA supply at just $1B this week. CTAs are expected to step in as buyers during squeezes. The S&P 500 is now ~70 points away from reclaiming its 200-day moving average (5,742). Retail investors also returned to the market, with meme stocks surging +750bps over the past two sessions.
### Key Events to Watch
- NVIDIA GTC: Jensen Huang’s keynote at 1 PM.
- Investor Days: GLW and ADBE.
- Geopolitics: Trump and Putin expected to discuss Ukraine.
### Notable Weakness in Mega-Cap Tech
Mega-cap tech (“Mag 7”) showed weakness today, raising questions with no clear catalyst. Tesla fell 5%, and NVIDIA positioning ahead of GTC may have contributed. Investors are navigating quarter-end dynamics, questioning whether the global macro environment will support a positive EPS revision cycle for mega-cap tech after months of flat revisions. Lower prices may also reflect lowered expectations.
### Sector & Factor Trends Ahead of FOMC
As we approach Wednesday’s FOMC meeting, Goldman Sachs’ Long/Short Stagflation Pair Index (GSPUSTAG) is up +17% YTD. Stagflation-friendly sectors include Healthcare, Energy, Consumer Services (over Goods), and Value factors. Conversely, Industrials, Information Technology, Materials, and Communication Services are underperforming.
### Desk Activity Recap
- Overall Activity: Rated a 5/10.
- LOs: Finished -$2.7B net sellers, driven by broad supply in Tech, Industrials, and Consumer Discretionary.
- HFs: Ended +$1B net buyers, with demand in Tech, Industrials, Financials, and REITs.
Buybacks: Entering Day 1 of the blackout period, which lasts until April 25. Activity typically drops ~30% during this period. Limited 10b5-1 plans remain.
Quarter-End Pension Rebalancing: A mixed picture, with $29B in equities to buy versus $29B in bonds to sell.
### Derivatives Update
- CTA Positioning: Selling pressure has largely dissipated. CTAs are modeled as minor sellers across all scenarios for the next week.
- Gamma Exposure: Remains light, with dealers never long/short more than $2B of S&P within an 8% band.
- Flow Trends: Slower today, with sellers of volatility and demand for VIX downside via puts and put spreads (out to April). Desk supports these trades, expecting continued declines in volatility.
Weekly Straddle: Implied move of 1.88%, factoring in Wednesday’s FOMC decision.
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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!