SP500 LDN TRADING UPDATE 12/05/25
WEEKLY BULL BEAR ZONE 5740/30
WEEKLY RANGE RES 5810 SUP 5550
DAILY VWAP BULLISH 5661
WEEKLY VWAP BULLISH 5571
DAILY BALANCE 5741/5596
WEEKLY ONE TF UP 5596
MONTHLY NEUTRAL
GAP FILL LEVELS 5684
WEEKLY ACTION AREA VIDEO TO FOLLOW AHEAD OF NY OPEN
GOLDMAN SACHS TRADING DESK VIEWS
U.S. EQUITIES COLOR: Week of May 9, 2025
An ultra-quiet session as institutional investors remain in “wait-and-see” mode, awaiting further macro clarity. Retail optimism is evident, driven by anticipation of the US-China meeting in Geneva this weekend. Notable movers include TSLA (+5%, breaking through the 200-day moving average), LYFT (+28%, better-than-expected EPS), and Bitcoin, which surged back above $100k, hitting a three-month high—signaling recovering risk appetite across asset classes. Goldman Sachs’ economic team notes the 10% baseline tariff is likely to remain for other trading partners but suggests potential flexibility on sectoral tariffs.
Broad indices closed the week relatively unchanged. Flows were benign, with long-only (L/O) funds and hedge funds (HFs) finishing as slight net sellers. L/Os remained cautious, while HFs adjusted short books to navigate earnings season. Sector-specific skews were minimal; Healthcare and Tech saw slight selling pressure due to policy changes and stock-specific news (e.g., GOOGL, AAPL), while Industrials experienced modest net buying.
Key macro focus for next week includes CPI (Tuesday), Retail Sales (Thursday), and Powell’s speech at the Thomas Laubach Research Conference (Thursday). Earnings season winds down as conference season begins, with several competitor events across TMT, Industrials, and Healthcare sectors, alongside the Goldman Sachs Staples Forum (Tuesday). Watch for Trump’s anticipated Executive Order on Medicare Most Favored Nation (MFN) drug pricing early next week.
Prime Weekly:
U.S. long/short (L/S) net leverage dropped this week, remaining near five-year lows, suggesting discretionary managers are not fully embracing the rally. By sector, HFs bought the dip in Healthcare for a second consecutive week, driven by long positions. Conversely, they continued to fade the rally in Info Tech, marking a fourth straight week of net selling, with Software positioning falling to fresh five-year lows. Trading flows showed HFs modestly net buying U.S. equities, driven by long buys outpacing short sales.
Derivatives:
Flows were mixed ahead of this weekend’s U.S.-China trade talks. Notable downside demand emerged in IWM and QQQs, particularly in shorter-dated options, as traders positioned for spot declines and volatility increases. The VIX July 30/40 call spread was bought 20,000 times, while some clients explored upside scenarios for U.S.-China trade negotiations. Names like BABA and KWEB saw interest for potential relief rallies if tariffs are reduced. Next week’s focus includes CPI, Powell’s remarks, and the kickoff of several sector conferences. The S&P implied move through 5/16 stands at 2.34%.
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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!