S&P500 Trading Update 13/4/26
S&P500 Trading Update 13/4/26
***QUOTING ES1! FOR CASH US500 EQUIVALENT LEVELS, SUBTRACT POINT DIFFERENCE***
WEEKLY BULL BEAR ZONE 6730/20
WEEKLY RANGE RES 6745/35 SUP 6955/75
April OPEX Straddle: 328.55pt range implies a OPEX to OPEX range of [6177, 6835]
June QOPEX Straddle is 546.4pt giving us a range of [5960,7052]
JHEQX Q2 Collar 6189/6290 - 6865/6955
DEC2025 OPEX to DEC2026 OPEX is 945 points giving us a range of [5889,7779]
SPX PUT/CALL RATIO 1.17 (The numbers reflect options traded during the current session. A put-call ratio below 0.7 is generally considered bullish, and a put-call ratio above 1.0 is generally considered bearish)
DAILY VWAP BULLISH 6756
WEEKLY VWAP BULLISH 6591
MONTHLY VWAP BULLISH 6816
DAILY STRUCTURE – OTFH - 6846
WEEKLY STRUCTURE – BALANCE - 6911/6359
MONTHLY STRUCTURE - OTFD - 6911
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 Down (OTFD): This describes a market trend where each successive bar forms a lower high, indicating a pronounced and steady downward movement.
DAILY BULL BEAR ZONE 6845/55
GAMMA FLIP 6638
DAILY RANGE RES 6922 SUP 6789
2 SIGMA RES 6988 SUP 6722
VIX BULL BEAR ZONE 22
TRADES & TARGETS
SHORT ON REJECT/RECLAIM OF DAILY BULL BEAR ZONE TARGET WEEKLY BULL BEAR ZONE
***ADDITIONAL SETUPS & TARGETS HIGHLIGHTED ON THE CHARTS***
(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 VIEW - ‘Weekend Thoughts’
2026 is a trading environment unlike any other — Jim Nantz, if he covered markets instead of green jackets.
1/ Equity beta comes back from the brink
2/ Geopolitical clarity drives a meaningful risk-on rotation
3/ CTA-related questions likely hit all-time highs tomorrow
4/ If the first-order moves are already priced, the key question becomes: where are the next pockets of opportunity?
Consensus: if you liked it before the conflict, you are going to love it now.
Good luck.
1/ A terrible month meets an exceptional week
Think escalator down, elevator up — and a reminder of why vol skew can feel “broken” in the academic sense.
• March 2026 saw long/short hedge funds decline -5%, their worst month in four years
• Last week (Apr 6–10) saw long/short hedge funds rise +4.4%, their best weekly performance in five years and a top-five weekly gain of the last decade
• The fear of the right tail across our client base was well founded and ultimately correct. Few owned it through convexity; most managed exposure through linear expressions
• Fun fact: there have been more daily S&P 500 rallies of >250 bps in the last two weeks than there have been >250 bps daily selloffs in the last year
• In this tape, single-session rallies are sharper than single-session declines
2/ Hedge fund positioning: geopolitical clarity encourages offense
• The global prime brokerage book was net bought for the first time in eight weeks, driven by both long buying and short covering at a 1.4-to-1 ratio — a clear risk-on signal
• The U.S. prime brokerage book saw macro product and ETF short covering at the fastest pace of the last decade — also risk-on
• The global prime brokerage book also saw significant net selling in single stocks this week, at 1.8 standard deviations, driven by short sales — another sign of active repositioning
• U.S. long/short gross exposure stands at 211.9, in the 77th percentile on a three-year lookback
• Net exposure stands at 51.6, only the 21st percentile on a three-year lookback
3/ Systematic positioning: slow-moving strategies may still have significant demand to cover
Data as of Thursday night; next update tomorrow at 8:00 a.m.
• It is a green sweep, with nearly every scenario pointing to meaningful CTA buying
• Over the last month, this cohort sold $115 billion of global equities
• Over the next month, assuming a flat tape, they are expected to buy back all of that and more, with projected demand of +$119.5 billion
• The demand is most concentrated in U.S. index products, with nearly $70 billion of aggregate buying expected across SPX (+$52 billion), NDX (+$10.4 billion), and RTY (+$6.1 billion) over the next month in a flat market
• SPX now sits above the short-term threshold (6720), medium-term threshold (6738), and long-term threshold (6410) for the first time since January
4/ If first-order trades are already priced, where are the next pockets of opportunity?
• Software
The semiconductor versus software basket hit an all-time low on Friday, with the pair trade down 22% last week alone. There may be real opportunity emerging from the wreckage. As P. Callahan noted this morning, two names stand out: NOW trades just below 9x GIR estimated potential GAAP EPS, while the implied valuation of MSFT M365 commercial/consumer sits at 4x EV / 2027 GAAP EBIT. This does not feel like a “buy the basket” setup — it feels like a single-stock picker’s market
• Non-U.S. equities
KOSPI was one of the market’s favorite longs heading into the conflict and still sits 7% below late-February levels — likely worth revisiting. Japan and Brazil also continue to offer strong fundamental backdrops and positive catalyst paths ahead, and we remain constructive there
• U.S. single names into earnings
Earnings season begins this week, with 8% of the S&P 500 reporting this week, 24% next week, and 36% the week after. Ben Snider and team stayed firm on earnings expectations even at the lows, with a base case of +12% EPS growth in 2026. Goldman Sachs is overweight Materials and Healthcare into Q1 prints and updated its conviction list as of April 1
• Rates
A negotiated resolution reduces the tail risk of higher commodity prices feeding into inflation. While the bar for rate cuts remains extremely high, the move in shorter-dated rates likely looks done for now. Lower-yield trades have worked — 1y1y
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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!