SP500 LDN TRADING UPDATE 26/02/25
WEEKLY BULL BEAR ZONE 6050/60
WEEKLY RANGE RES 6142 SUP 6061
DAILY BULL BEAR ZONE 6025/35
DAILY RANGE RES 6021 SUP 5938
TODAY'S TRADE LEVELS & TARGETS
SHORT ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY RANGE SUP
LONG ON ACCEPTANCE ABOVE DAILY BULL BEAR ZONE TARGET WEEKLY BULL BEAR ZONE
LONG ON TEST/REJECT OF WEEKLY RANGE SUP TARGET DAILY BULL BEAR ZONE
YOU CAN REVIEW THE WEEKLY ACTION AREA VIDEO HERE
GOLDMAN SACHS TRADING DESK VIEWS
U.S. EQUITIES UPDATE: MARKET DISCOMFORT PERSISTS
FICC and Equities | 25 February 2025
Market Overview:
- S&P 500: -47bps, closing at 5955, with a MOC of $430mm to BUY.
- Nasdaq 100 (NDX): -124bps, ending at 21087.
- Russell 2000 (R2K): -38bps, closing at 2170.
- Dow Jones: +37bps, finishing at 43621.
Volume & Volatility:
- 16.3bn shares traded across U.S. equity exchanges, above the YTD daily average of 15.2bn shares.
- VIX climbed +237bps to 19.43.
Commodities & FX:
- Crude Oil: -218bps to $69.15.
- U.S. 10-Year Yield: -10bps at 4.29%.
- Gold: -119bps at $2916.
- DXY (Dollar Index): -32bps at 106.26.
- Bitcoin: -636bps to $87,996.
Sentiment & Key Trends:
The market remains under pressure, with retail investors stepping back. Bitcoin fell 8% today and is down 27% over the last five sessions. Similarly, the GSXUMEME Index dropped 8% today and 27% over five sessions. A negative feedback loop is evident: retail inactivity has triggered a momentum unwind among hedge funds, with the GSCBHMOM index down 6% today and 17% over the last five sessions.
Technicals are adding to the headwinds. CTA selling totaled $11bn in S&P this week at current levels, and if the S&P breaches 5886 (medium-term momentum), this supply could double. The S&P broke its 50-day moving average yesterday and its 100-day moving average today (5945).
Consumer Confidence Data:
- February consumer confidence came in at 98.3, below the expected 102.5.
- The Expectations Index fell below 80 for the first time since June 2024, signaling potential recession risks.
- Inflation expectations for the next 12 months surged from 5.2% to 6%.
- Concerns about trade and tariffs have risen sharply, reaching levels not seen since 2019. Sentiment around the current administration and its policies dominated survey responses.
Trading Activity:
- Overall activity on the trading floor was rated a 7/10.
- The floor ended the day as net sellers (-5.8%), compared to a 30-day average of +114bps.
- Asset managers remain cautious, while hedge funds are actively de-grossing.
- Long-only funds finished as $1bn net sellers, driven by supply in Communication Services, Tech, Staples, and Industrials, with demand focused on macro products.
- Hedge funds closed the day as net buyers, concentrating demand in Tech and Macro products, while showing some supply in Staples.
NVDA Setup:
- Options imply a 10% move through Friday. Positioning is rated 7/10.
- The stock has been range-bound for ~8 months due to increased complexity (ASICs vs. Merchant, DeepSeek, Blackwell timing, contracting GMs q/q).
- Near-term expectations appear tempered, with investors bracing for a more modest beat/raise cadence compared to the typical ~$1-2bn beat and a q/q guide-up of +$2bn.
- Focus is shifting to commentary on the July quarter, including Blackwell product timing, China demand, and broader 2026+ guidance. Consensus estimates: January revenues ~$38.1bn, April revenues ~$42.2bn.
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Past performance is not indicative of future results.
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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!