SP500 LDN TRADING UPDATE 26/8/25
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 6470/80
DAILY RANGE RES 6518 SUP 6401
2 SIGMA RES 6580 SUP 6340
VIX DAILY BULL BEAR ZONE 17.75
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
SHORT ON TEST/REJECT DAILY BULL BEAR ZONE TARGET WEEKLY BULL BEAR ZONE
LONG ON TEST/REJECT WEEKLY BULL BEAR ZONE 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
Market Summary
▪ Overall market activity decreased by 7% week-over-week to 15.7 billion shares from 16.9 billion shares.
▪ The off-exchange market share for the week rose to 51%, an 8% increase compared to the 2024 average of 47%.
▪ E-mini S&P 500 top-of-book liquidity fell by 12% relative to the 10-day average.
▪ S&P 500 spreads decreased by 5% compared to the 10-day average but increased by 8% compared to the 2024 average.
▪ Russell 2000 spreads were down by 1% compared to the 10-day average but up by 10% against the 2024 average.
▪ The proportion of ETFs by notional as a percentage of the tape increased by 10% relative to the 10-day average, comprising 22% of the share volume.
▪ Last week, retail flows showed a net buy imbalance of $10 billion.
Throughout the continuous trading session (excluding auctions and pre/post-market), a greater number of shares are traded off exchange as spreads increase; conversely, this trend reverses on a notional basis.
In 2025, up to July, shares with spreads greater than 25 bps tend to be traded more off-exchange, likely influenced by retail trading in lower-priced stocks (this specific share category has the lowest average price of the four categories).
In terms of shares, the trading volumes are fairly distributed among the four spread categories, with the 10-25 bps category accounting for 31% of trades.
On a notional basis, the majority of trading occurs in the <5 bps category; when this category is combined with the 5-10 bps category, together they represent 64% of notional trading activity.
The narrower spreads seen in higher notional stocks may be partly due to the Mag 7 symbols, which, being more popular, have higher share prices and benefit from tighter spreads
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.
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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!