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SP500 LDN TRADING UPDATE 27/11/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! FOR CASH US500 EQUIVALENT LEVELS, SUBTRACT POINT DIFFERENCE***
WEEKLY BULL BEAR ZONE 6590/80
WEEKLY RANGE RES 6765 SUP 6475
NOV EOM STRADDLE 7054/6626
DEC QOPEX STRADDLE 7025/6303
DAILY STRUCTURE – ONE TIME FRAMING HIGHER - 6795
DAILY BULL BEAR ZONE 6805/6795
DAILY RANGE RES 6887 SUP 6772
2 SIGMA RES 6944 SUP 6715
DAILY VWAP BULLISH 6720
VIX BULL BEAR ZONE 22.2
TRADES & TARGETS
LONG ON ON REJECT/RECLAIM DAILY BULL BEAR ZONE TARGET DAILY RANGE RES
SHORT ON TEST/REJECT DAILY 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 ABOVE OR BELOW THESE LEVELS)
GOLDMAN SACHS TRADING DESK VIEWS
U.S. EQUITIES COLOR:
The S&P 500 is on track for its fourth consecutive significant rally. A $6 billion S&P 500 buy program, driven by November month-end pension rebalancing this week, is contributing to the momentum. The index has reclaimed two critical technical levels: 6721 (50-day moving average) and 6711 (short-term CTA momentum threshold). Regarding the latter, CTAs now have only -$1.8 billion of S&P 500 to sell over the next week, a significant improvement compared to -$12.8 billion sold last week.
OpenAI-related AI stocks, including ORCL and CRWV, are rebounding alongside NVDA, supported by strong hedge fund and long-only demand in the sector. Our sentiment indicator remains in negative territory at -0.3, reflecting cautious institutional investor positioning. Despite this, the persistent "wall of worry" throughout the year—a bullish signal—continues to loom large. The S&P 500 has achieved 36 all-time highs this year, with the most recent on October 28 (6,890). More record highs are likely before we close out 2025.
The market is now pricing in an 82% probability of a rate cut on December 10, a sharp increase from just 29% one week ago. Activity on our corporate buyback desk is robust, running at 1.4 times the year-to-date daily average notional executed. We are currently in the peak open window for buybacks, which typically see a surge in Q4 as companies aim to meet year-end repurchase targets. We expect this open window to remain active through December 19, 2025.
We have rebounded into a gamma pocket, with dealers estimated to hold a long position of approximately +$6.5 billion in gamma. The three-day increase marks the second largest in over three years. Assuming all other factors remain constant, we anticipate realized volatility to ease and liquidity conditions to improve. Notably, the S&P 500 top-of-book depth currently stands at $9 million, compared to the year-to-date average of $11.5 million (for context, this figure dropped below $3 million last week).
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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!