SP500 LDN TRADING UPDATE 6/05/25
WEEKLY BULL BEAR ZONE 5640/30
WEEKLY RANGE RES 5580 SUP 5840
DAILY VWAP BULLISH 5641
WEEKLY VWAP BULLISH 5483
DAILY BALANCE 5724/5618
WEEKLY ONE TF UP 5455
MONTHLY ONE TF DOWN 5739
GAP FILL LEVELS 5339/5606
WEEKLY ACTION AREA VIDEO TO FOLLOW AHEAD OF NY OPEN
GOLDMAN SACHS TRADING DESK VIEWS
U.S. EQUITIES UPDATE: S&P WINNING STREAK ENDS
FICC and Equities | 5 May 2025 | 8:29 PM UTC
Market Overview:
- S&P 500: -0.64%, closed at 5,565 with MOC buy orders worth $830M (after a 10-day winning streak).
- Nasdaq 100 (NDX): -0.67%, closed at 19,967.
- Russell 2000 (R2K): -0.85%, closed at 2,009.
- Dow Jones (DJIA): -0.24%, closed at 41,218.
- Volume: 13.9B shares traded across U.S. equity exchanges, below YTD daily average of 16.4B (-32% vs 20-day average).
- Volatility Index (VIX): +0.236 pts, closed at 23.64.
- Commodities: Crude oil -2.41% at $57.04; Gold +2.96% at $3,339.
- Treasuries: U.S. 10YR yield -3 bps at 4.34%.
- Currencies: DXY -0.24% at 99.78.
- Crypto: Bitcoin -1.57% at $94,228.
Summary:
U.S. equities pulled back by ~0.70% across the board, breaking the S&P 500’s longest winning streak in over 20 years. Trading volumes were muted, with major markets like the UK, Japan, China, and Korea closed. Beneath the surface, sector dispersion was notable:
- Gainers: Airlines rallied as crude prices dropped following an OPEC+ production hike. Retail saw strength, highlighted by SKX surging +25% on news of its acquisition by 3G Capital.
- Losers: Communication Services (NFLX, WBD -2% on proposed foreign media tariffs), Mega Cap Tech (Mag7, AAPL -3% amid Buffett retirement speculation), and MedTech (ZBH -12% on in-line earnings reflecting deal dilution and tariff concerns).
On the data front, ISM Services exceeded expectations, though prices paid hit their highest level since February 2023. Tariffs were a recurring theme, mentioned 13 times in April’s press release (compared to 13 in March and just 5 in January).
Market Activity:
- Activity levels on a scale of 1-10 were rated at 4, with institutional flows muted.
- Long-Onlys remained largely inactive, while Hedge Funds pressed shorts cautiously. Both groups ended as slight net sellers, with sector-level skews benign.
Post-Bell Earnings Highlights:
- PLTR: +5% (beat and raised guidance).
- LSCC: -2% (in-line quarter).
- NBIX: +11% (in-line with consensus, 2025 Ingrezza guidance reaffirmed).
- Ford: -3% (suspended FY forecast due to $1.5B tariff-related uncertainty).
Liquidity and Positioning:
- Top-of-book depth remains weak at $4M (vs historical average of $13M).
- CTAs reduced S&P 500 shorts to -$12.6B (down from -$21B two weeks ago) and are projected buyers under all scenarios this week.
- Buybacks: Estimated ~75% of companies are in open periods, increasing to ~85% by week’s end.
- L/S hedge funds are flat YTD, with gross leverage at the 100th percentile (3-year lookback) and net exposure at the 4th percentile.
Derivatives Update:
- Volatility ticked higher, with skew continuing to sell off from elevated levels.
- Notable trades included a buyer of the Aug 25 straddle (20K contracts) and Jul 26 calls (15K contracts). Interest in IWM calls suggests positioning for a short squeeze.
- Gamma positioning remains balanced, with dealers flat but leaning shorter on both upside and downside risks.
- Weekly straddle pricing at 1.80%, factoring in Wednesday’s FOMC meeting.
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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!