SP500 LDN TRADING UPDATE 15/7/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~45 POINTS***
WEEKLY BULL BEAR ZONE 6220/30
WEEKLY RANGE RES 6384 SUP 6204
DAILY BULL BEAR ZONE 6315/05
DAILY RANGE RES 6368 SUP 6251
2 SIGMA RES 6426 SUP 6193
GAP LEVELS 6147/6077/6018/5843/5741/5710
VIX BULL JULY CONTRACT BEAR ZONE 21.35 DAILY BULL BEAR ZONE 16.75
DAILY MARKET CONDITION - BALANCE - 6335/6238
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.
TRADES & TARGETS
SHORT ON TEST/REJECT DAILY RANGE RES TARGET DAILY BULL BEAR ZONE
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE RES
SHORT ON TEST/REJECT WEEKLY 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 UPDATE: AHEAD OF CPI AND BANK EARNINGS
FICC and Equities | 14 July 2025 | 8:24 PM UTC
Market Performance:
- S&P 500: +14bps, closing at 6,268, with a Market-on-Close (MOC) imbalance of $270M to buy.
- Nasdaq 100 (NDX): +33bps, closing at 22,855.
- Russell 2000 (R2K): +59bps, closing at 2,261.
- Dow Jones: +20bps, closing at 44,459.
Trading volumes reached 15.4B shares across all U.S. equity exchanges, 13% below the 20-day average and trailing the year-to-date daily average of 16.8B shares.
Volatility and Other Assets:
- VIX: +500bps, closing at 17.22.
- Crude Oil: -216bps, settling at $66.97.
- U.S. 10-Year Yield: +2bps, closing at 4.43%.
- Gold: -32bps, closing at $3,353.
- DXY (Dollar Index): +24bps, closing at 98.09.
- Bitcoin: +48bps, trading at $119,690.
Market Sentiment:
A quiet start to the week, with volumes down 13% versus the 20-day average. Markets appeared resilient despite the latest tariff developments, including a 30% tariff on imports from the EU and Mexico, effective August 1.
Last week, we raised our S&P 500 year-end price target for 2025 to 6,600. While some clients expressed concerns over valuation multiples (currently at 22x, ranking in the 97th percentile since 1980), our macro model supports this level given the backdrop of declining interest rates, low unemployment, and strong corporate profitability, particularly among mega-cap stocks.
Bank Earnings Kick Off:
Major banks (JPM, C, and WFC) report earnings tomorrow, with expectations tempered. The S&P 500 YoY EPS growth estimate stands at 4%. Key focus areas include:
1. Net Interest Income (NII) outlook.
2. Impact of recent tariff announcements on investment banking activity.
3. Potential for capital returns amid deregulation.
CPI Data in Focus:
All eyes are on tomorrow's CPI report. Consensus for Core MoM stands at +0.3%, while GIR forecasts +0.23% for June Core CPI. Key drivers include:
- Decline in used car prices (-0.5%).
- Moderate increases in car insurance (+0.3%) and airfares (+1%).
- Slight uptick in core services inflation (+0.26%) from its recent softness.
The forecast assumes higher tariff costs will add 8bps to MoM Core CPI, with the impact skewed toward household furnishings and recreational/communication goods. While we expect Core CPI inflation to rise in H2 2025 as tariffs increasingly boost prices (forecasting +3.1% YoY by December), a milder tariff-driven increase this month would support our expectation for a 25bps Fed rate cut in September, followed by two additional cuts later in 2025.
Client Activity and Hedge Fund Trends:
Activity levels were subdued, scoring a 4 on a 1-10 scale.
- LOs (Long-Only Funds): Flat.
- HFs (Hedge Funds): Net buyers, adding $1B, with demand scattered across staples and tech.
Per GSPB data, fundamental L/S hedge funds gained +11bps last week, bringing YTD performance to +595bps. Gross exposure remains high at 212% (87th percentile on a 1-year lookback, 97th percentile on a 5-year lookback), but net exposure is relatively low at 52% (39th percentile on a 1-year lookback, 28th on a 5-year).
Derivatives Market:
A slow grind higher with both volatility and skew bid up on the day. Flows were minimal as clients adopted a wait-and-see approach ahead of tomorrow’s data release. Systematic strategies, including CTA and volatility-controlled funds, continue to support the market, with buying likely to increase in the coming weeks.
With volatility at low levels, the desk favors shorter-dated outright puts or put spreads in the belly of the curve as leveraged hedging strategies. The implied straddle for CPI is priced at 0.57%.
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!