SP500 LDN TRADING UPDATE 19/1/26
SP500 LDN TRADING UPDATE 19/1/26
***QUOTING ES1 CONTRACT FOR CASH US500 EQUIVALENT LEVELS SUBTRACT POINTS DIFFERENCE***
***WEEKLY ACTION AREA VIDEO TO FOLLOW AHEAD OF NY OPEN***
WEEKLY BULL BEAR ZONE 6900/6890
WEEKLY RANGE RES 7047 SUP 6903
FEB OPEX STRADDLE 6726/7154
MAR QOPEX STRADDLE 6466/7203
DEC 2026 OPEX STRADDLE 5889/7779
The area around the SPX aggregate gamma flip is at 6940. While the upside gamma is pronounced, it has somewhat smoothed since last week's vertical surface. The index has more leeway to rise. Based on the most recent analysis (Friday AH), the steep surface develops around 7030.
DAILY VWAP BEARISH 6979
WEEKLY VWAP BULLISH 6969
MONTHLY VWAP BULLISH 6850
DAILY STRUCTURE – BALANCE - 6923/7025
WEEKLY STRUCTURE – BALANCE - 6923/7025
MONTHLY STRUCTURE – ONE TIME FRAMING HIGHER - 6775
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 favouring fade trades at the range extremes (highs/lows) while preparing for potential breakout scenarios if the balance shifts.
One-Time Framing Higher (OTFH): This represents a market trend where each successive bar forms a higher low, signalling a strong and consistent upward movement.
One-Time Framing Lower (OTFD): This describes a market trend where each successive bar forms a lower high, indicating a pronounced and steady downward movement.
GOLDMAN SACHS TRADING DESK VIEWS
### Market Recap and Insights:
Last week, stronger U.S. economic data and a renewed reflation narrative—bolstered by commodities such as copper, silver, gold, nickel, and aluminum reaching new highs—contributed to a bear-flattening of the curve. Structurally, most participants remain positioned in 5s30s steepeners, although some liquidations occurred, leaving the 5-year point relatively undervalued on the curve.
There is ongoing speculation that, contrary to tradition, the Fed Chair may remain as a Fed Governor after their term ends to provide balance within the Board. Meanwhile, the front end of the curve has seen some repricing, with a steepening in the M6U6 SOFR spread.
### Weekend Headlines:
- "Trump to Hit Europe with 10% Tariffs Until Greenland Deal is Agreed"
- "EU Set to Halt US Trade Deal Over Trump’s New Tariff Threat"
(Refer to sources: Financial Times, Bloomberg)
### Market Activity:
Last Friday witnessed significant buying activity in U.S. Treasury futures, including block trades of:
- 90k TY contracts purchased (approximately $5.6m in DV01)
- 50k FV contracts purchased (approximately $2.2m in DV01)
Positioning in the U.S. 30-year sector remains short but has slightly reduced following recent moves in 5s30s. In Europe, duration positioning remains near maximum short levels. On a one-week horizon, CTAs are expected to be buyers of U.S. long-end duration and European duration.
### Key Focus:
The primary question for tomorrow’s trading is whether markets will adopt a risk-off stance due to renewed U.S.–EU trade-war rhetoric and elevated geopolitical risks tied to Iran. Our Treasury desk continues to favor long-duration positions at the back end of the U.S. curve.
The Week Ahead from the Futures Desk (Week of January 19th)
### Key Events for the Week Ahead:
January 19th:
- European CPI (Final)
- US Holiday
- Canada CPI
- Japan Industrial Production
January 20th:
- German PPI
- ZEW Current Situation
- UK Unemployment
- ECB Speaker Nagel
- Japan Supply
January 21st:
- UK CBI Industrial Trend Orders
- UK CPI
- ECB Speakers: Lagarde, Villeroy, and Nagel
- UK and German Supply
- US 20-Year Auction
January 22nd:
- Japan CPI
- Australian PMI and Unemployment
- French Supply
- ECB Minutes
- US GDP
- Initial Jobless Claims
- PCE
- 10-Year TIPS Auction
January 23rd:
- BoJ Rate Decision
- UK Retail Sales
- UK, France, and Germany PMI
- ECB Speaker Lagarde
- US Flash PMIs
- University of Michigan Consumer Sentiment
- Canada Retail Sales
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.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% and 73% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
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!