SP500 LDN TRADING UPDATE 21/06/25
***QUOTING SEP CONTRACT FOR JUNE CONTRACT OR CASH US500 EQUIVALENT LEVELS SUBTRACT ~30 POINTS***
***WEEKLY ACTION AREA VIDEO TO FOLLOW AHEAD OF NY OPEN***
WEEKLY BULL BEAR ZONE 6300/6280
WEEKLY RANGE RES 6410 SUP 6260
DAILY VWAP BEARISH 6313
WEEKLY VWAP BULLISH 6293
DAILY ONE TIME FRAMING UP - 6323
WEEKLY BALANCE - 6224/6353
MONTHLY ONE TIME FRAMING UP - 5870
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.
One-Time Framing Up (OTFU): This represents a market trend where each successive bar forms a higher low, signaling a strong and consistent upward movement.
One-Time Framing Down (OTFD): This describes a market trend where each successive bar forms a lower high, indicating a pronounced and steady downward movement..
GOLDMAN SACHS TRADING DESK VIEWS
US stocks posted modest gains, pushing the S&P 500 (SPX) and Nasdaq 100 (NDX) to new all-time highs as investors digested a mix of "goldilocks" macroeconomic data (CPI, PPI, Retail Sales, Philly Fed, UMich) alongside stronger-than-expected corporate earnings. Notably, 61% of reporting companies exceeded consensus estimates by more than one standard deviation, surpassing the historical average of 48%. Among the week's standout performers were Rare Earths, Nuclear energy, and Non-Profitable Tech sectors, while Oil, US Ireland-Exposed Healthcare, and Housing-related sectors lagged.
Prime Brokerage Trends: Hedge funds (HFs) net sold US equities for the third consecutive week, driven by selling in Macro Products, particularly via short positions, which outweighed buying in Single Stocks led by long positions. Eight of eleven sectors were net bought, with Industrials leading for the eighth straight week. Within the Technology sector, flows showed divergence at the subsector level: Software and IT Services saw the highest net buying, while Communication Equipment and Semiconductors experienced the most net selling, suggesting potential HF rotation into year-to-date underperformers.
Flows: Long-only (LO) investors maintained flat flows, while hedge funds screened as net buyers, adding approximately $2 billion during the week. A notable trend emerged with "STOP INS" returning to the market, concentrated in big TMT (Technology, Media, Telecom) year-to-date winners and thematic longs, primarily driven by global asset managers. Largest buy skews were seen in Information Technology, Communication Services, and Financials, while Macro Products experienced the largest sell skews. No sectors were materially net sold during the week. The S&P 500 implied move through next Friday (7/25) stands at 1.20%.
Futures: Non-dealers purchased $4.5 billion in Nasdaq futures between July 1–8, marking the eighth consecutive week of buying for a cumulative total of ~$38 billion since May 13. However, sentiment moderated between July 8–16, as Nasdaq 3-month funding cheapened slightly, leading to net selling via leveraged products. Despite this, Nasdaq futures net length remains elevated, ranking in the 93rd percentile on a two-year lookback as of July 8, setting a high bar for the earnings season where preliminary results have been mixed.
Derivatives: Approximately 70% of the TMT sector is scheduled to report earnings over the next two weeks, with the average tech stock implying an earnings-day move of 4.7%, the lowest level in two decades, making it relatively inexpensive to hedge tech earnings. For the broader US market, dealers appear highly long gamma, combined with low implied daily moves, supporting a continued low-volatility grind higher. Volatility control funds are nearing maximum capacity, while CTAs still have room to invest further. Additionally, corporate buybacks are set to resume next week.
Baskets: High conviction remains in the Accelerated Bonus Depreciation theme (GSXU100D). Following the passage of the One Big Beautiful Bill Act, US businesses can expense 100% of the cost of tangible assets with a lifespan of 20 years or less in the first year of purchase. Over the past three months, the GSXU100D basket's projected 2025 CapEx spending has been revised upward by 26%, compared to 13% for the broader SPW index. This accounting change is expected to boost cash flow, incentivize US manufacturing, and drive demand for qualifying products.
Sector Highlights: Industrials are expected to deliver strong earnings, with high-quality companies having priced and guided for higher tariff rates during Q1. As the calendar shifts into Q3 and the second half of the year, the debate centers on whether concentrated performance (e.g., Aerospace and AI/Data Centers) will broaden. Incremental focus areas include machinery, short-cycle industries, building products, autos, and airlines. Healthcare experienced a high-velocity week with notable developments: (1) Waters Corporation (WAT) sold off following its $17.5 billion transaction with Becton Dickinson’s (BDX) Biosciences and Diagnostics Solutions business, sparking debates about growth dilution; (2) earnings season triggered sharp stock movements, including Johnson & Johnson (JNJ) up 6.2% Wednesday, Abbott (ABT) down 8.5% Thursday, and Elevance Health (ELV) down 12% Thursday (-7.5% Friday); (3) idiosyncratic updates drove additional volatility, such as Sarepta Therapeutics (SRPT) surging 19.5% Thursday on Elevidys progress, only to reverse by falling 26% Friday after news of a third patient death from its gene therapy and FDA scrutiny.
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.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
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!