SP500 LDN TRADING UPDATE 29/7/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~15 POINTS***
WEEKLY BULL BEAR ZONE 6380/90
WEEKLY RANGE RES 6515 SUP 6335
DAILY BULL BEAR ZONE 6440/50
DAILY RANGE RES 6483 SUP 6366
2 SIGMA RES 6541 SUP 6308
GAP LEVELS 6147/6077/6018/5843/5741/5710
VIX DAILY BULL BEAR ZONE 17.25
DAILY MARKET CONDITION - ONE TIME FRAMING UP 6402
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.
TRADES & TARGETS
SHORT ON TEST/REJECT DAILY BULL BEAR ZONE TARGET WEEKLY BULL BEAR ZONE
LONG ON TEST/REJECT WEEKLY BULL BEAR ZONE 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: MUTED
FICC and Equities | 28 July 2025 |
Equities closed with muted activity: S&P 500 +2bps @ 6,389 (MOC +$1.2B to buy), NDX +36bps @ 23,356, R2K -9bps @ 2,269, and Dow -14bps @ 44,837. A total of 17.8 billion shares traded across U.S. equity exchanges, exceeding the YTD daily average of 16.8 billion. Volatility ticked higher as VIX rose +65bps @ 15.03. Key assets showed mixed movements: Crude +282bps @ $67.00, US 10YR +2bps @ 4.41%, gold -63bps @ 3,371, DXY +105bps @ 98.67, and Bitcoin +10bps @ $118,157.
The session was quiet, marked by low volume ahead of a busy week. Key catalysts include 38% of S&P market cap reporting earnings (META and MSFT on Wednesday night, AAPL and AMZN on Thursday night), macro events like the FOMC decision (Wednesday), NFP/ISM data (Friday), and BOJ decision (Thursday). Breadth was narrow, with S&P Equal Weight underperforming by ~60bps. REITs (Insurance, Tower, Healthcare) faced pressure, though no definitive driver emerged—likely factor-driven after recent gains. Insurance concerns are ongoing but fundamentals remain positive for Tower and large-cap Healthcare REITs heading into earnings.
TRADE FOCUS: Over the weekend, the U.S. and EU reached an agreement imposing 15% tariffs on most EU exports to the U.S., including autos, while the EU committed to purchasing $750 billion in American energy products and investing $600 billion in the U.S. Meanwhile, U.S. and China are expected to extend their trade truce by 90 days.
ACTIVITY LEVELS: Floor activity was rated 4/10, with muted client engagement. The floor finished +5% to buy, compared to a 20-day average of +18bps. LOs were net buyers (+$1.5B) across all sectors except REITs, while HFs were net sellers (-$800M), driven by supply in industrials, financials, and materials.
DERIVATIVES: Flows were balanced, with upside buying in megacap tech via call spreads ahead of earnings and downside hedging through 3-month put spreads, capitalizing on steep put skew. Gamma remains inexpensive, with daily straddles pricing below 35bps. Optionality in index and single names appears attractive given the macro-heavy week ahead. Implied move for Friday PM stands at 1.18% (credit to Braden Burke).
FLOW OF FUNDS:
- Systematics: Remain in buy mode, with global equity length climbing above 6.5/10 this week and projected to reach 8/10 next month in a baseline scenario. Flat tape demand estimates: 1 week = $24B, 1 month = $48B.
- Buybacks: Open window begins today (7/28). Approximately 40% of S&P 500 companies are expected to enter open windows by Friday. Companies typically enter discretionary buyback periods ~1-2 days post-earnings release, meaning activity should ramp up as earnings season progresses.
- Pensions: Modeled to sell $10B of U.S. equities for month-end, ranking in the 65th percentile for dollar value over the past three years and 69th percentile since January 2000.
GS PB: Hedge funds net sold U.S. equities for the fourth consecutive week, driven by long sales and, to a lesser extent, short covers. Single stocks were modestly net bought, primarily due to risk unwinds, with short covers outpacing long sales. Last week’s notional de-grossing in U.S. single stocks—combined long sales and short covers—was the largest in six months, ranking in the 94th percentile over a five-year period.
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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!