SP500 LDN TRADING UPDATE 27/8/25
WEEKLY & DAILY LEVELS
***QUOTING ES1! CASH US500 EQUIVALENT LEVELS SUBTRACT ~15 POINTS***
WEEKLY BULL BEAR ZONE 6420/10
WEEKLY RANGE RES 6560 SUP 6400
DAILY BULL BEAR ZONE 6440/50
DAILY RANGE RES 6545 SUP 6428
2 SIGMA RES 6608 SUP 6367
VIX DAILY BULL BEAR ZONE 17
DAILY MARKET CONDITION - BALANCE 6502/6362
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
LONG ON TEST/REJECT DAILY BULL BEAR ZONE TARGET DAILY/WEEKLY RANGE RES
SHORT ON TEST/REJECT DAILY/WEEKLY RANGE RES TARGET 6508
(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
MarketView Spotlight: Pre-NVDA Earnings
FICC and Equities | 26 August 2025 |
The technology sector has faced significant pressure recently, experiencing a widespread selloff as investors shifted away from megacaps ahead of Jackson Hole. The Nasdaq saw a sharp decline mid-week but rebounded following Powell’s comments; however, caution persists.
Key Takeaway: With Nvidia now representing approximately 8% of the S&P 500, its Q2 earnings report due on 8/27 is considered one of the most significant events, likely influencing the trajectory of AI investments and the overall tech sector. We have prepared the following chart pack to assist in understanding and tracking market sentiment and what is expected prior to the announcement:
- A majority of investors are optimistic about Nvidia's upcoming earnings, but retail speculation has tapered off compared to prior periods.
- From a fundamental perspective, EPS predictions have plateaued, leaving the market eager for new indications of growth.
- The market is reflecting uncertainty and taking protective measures ahead of the earnings announcement.
- GIR has maintained its Buy rating on Nvidia and raised its price target to $200, while acknowledging downside risks such as a deceleration in AI infrastructure spending, potential market share losses due to heightened competition, margin pressures from increased competition, and supply chain challenges.
Goldman's Flow Guru Privorotsky expresses his perspective as follows: He has been cautious since early August, observing that the low-liquidity fluctuations driven by the Fed persist. The fundamentals for consumers and labor are still weak, and there are new uncertainties surrounding the AI sector. Equity markets seem to be supported by underperformers in the Russell index due to hopes of interest rate cuts, yet long-term rates are rising rather than falling. The seasonal trend heading into September appears unfavorable. Commodity Trading Advisors (CTAs) hold approximately $170 billion in long positions, which is below their maximum of $220 billion. However, with 20-day volatility exceeding 60-day volatility, their demand for volatility control is depleted, meaning any increase in volatility might lead them to sell. The recommended strategy is to maintain long positions in front-end rates, short the dollar, and approach equities with caution until September, anticipating a probable buying opportunity by year-end. Notably, upcoming Treasury supply (over $180 billion in 2s, 5s, and 7s) and liquidity challenges at the end of the quarter present significant obstacles.
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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!