S&P500 Daily Action Areas & Price Targets 13/10/26

S&P500 Daily Action Areas & Price Targets 13/10/26

***QUOTING ES1!(Z CONTRACT LEVLES) FOR CASH US500 EQUIVALENT LEVELS, SUBTRACT POINT DIFFERENCE***

MONTHLY-WEEKLY& DAILY LEVELS

MONTHLY BULL BEAR ZONE 7440/7400

MONTHLY RANGE RES 7960 SUP 7663

WEEKLY BULL BEAR ZONE 7700/7690

WEEKLY RANGE RES 7926/16 SUP 7683/93

DAILY BULL BEAR ZONE 7820/10

GLOBEX RANGE SUP 7835/16 RES 7873/92

GAMMA FLIP 7841

DELTA FLIP 7825/30

CALL WALLS 7848/74

PUT WALLS 7846/02

UNFILLED GAPS 7741

DAILY STRUCTURE - BALANCE - 7897/7778

WEEKLY STRUCTURE - OTFH - 7778

MONTHLY STRUCTURE - OTFH - 7542

VIX BULL BEAR ZONE 17.7  

VVIX-to-VIX ratio of 5.65 sits right in the historical "sweet spot" for market positioning, but its composition reveals a quiet shift in market dynamics

PRIMARY TRADES & TARGETS 

LONG ON REJECT/RECLAIM OF THE DBBZ TARGET DAILY RANGE RES > ATH’S

***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)

SPX PUT/CALL RATIO 1.13 (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.

JHEQX Upside cap (~7,920–7,950): Dealer gamma hedging at this call strike creates resistance, with market makers likely selling futures into strength and limiting volatility. Downside cushion (~7,270): If SPX drops 5% into Q4, long put gamma may force dealers to buy futures as the index falls, helping stabilize prices. Expiration: December 31, 2026. Strong pinning effects are likely near key strikes into year-end expiration.

DEC2025 OPEX to DEC2026 OPEX is 945 points giving us a range of [5889,7779]

Notes On Structure Implications

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 (OTFL): This describes a market trend where each successive bar forms a lower high, indicating a pronounced and steady downward movement.

GOLDMAN SACHS FICC & EQUITY TRADING DESK VIEWS

THE TAKE: MARKET BREADTH DIVERGENCE & THE BULLISH CASE FOR HIGH CONCENTRATION

The disconnect between headline benchmark levels and the underlying equity market remains one of the most extreme structural features of current price action. While the S&P 500 continues to sit within 1% of its all-time highs, the median constituent stock is down -16% from its own 52-week peak. By Goldman Sachs' preferred internal measures, market breadth has deteriorated to its weakest level since the Dot-Com Bubble.

The clearest manifestation of investor apprehension beneath the surface is the aggressive flight to quality. The GS Quality Factor has surged over +16% across the past 8 weeks—a magnitude of flight-to-safety capital allocation not seen since the March 2020 COVID shock. Investors are favoring quality at a pace typically reserved for severe crisis periods, even as the index trades near record highs.

Despite widespread client anxiety over market narrowness, historical study indicates that extreme concentration is actually a bullish signal over a 1- to 3-month horizon. In a historical study of 13 episodes since 1995 where the 10 largest S&P 500 stocks outperformed the equal-weighted index (RSP) by >8% over 3 months (vs. 855 bps today), subsequent SPX returns averaged +10.1% over 6 months and +19.6% over 12 months (outperforming baseline historical medians of +6.9% and +15.0%).

POSITIONING & HEDGE FUND FLOW DYNAMICS

• GS Sentiment Indicator & Leverage Metrics:

  
  

  • The GS US Equity Sentiment Indicator has plunged to -1.3 SD, reaching levels where historical forward risk/reward turns strongly asymmetric to the upside.

  • Global Fundamental L/S Net Leverage sits in the 6th percentile over a 1-year lookback (and the 2nd percentile when isolating US L/S).

  • Overall Hedge Fund Net Leverage is at the 10th percentile, while Gross Exposure remains elevated—reflecting heavy risk on books with minimal directional conviction.

• Fundamental Alpha Performance Drag:

  
  

  • Fundamental L/S funds lost -70 bps between October 2 and October 8, driven by negative alpha across both long and short books.

  • US single stocks were net sold for a third consecutive week, with short sales outpacing long buys.

• Sector Rotation & Extremes:

  
  

  • Technology Reversal: After being net bought in 4 of the prior 5 weeks, Technology was by far the most net sold sector last week via long liquidations and fresh short additions. Tech L/S ratio has fallen to 1.8 (17th percentile over 5 years), despite gross allocations holding in the 97th percentile.

  • Industrials Inflows: Saw its fastest pace of net buying since January (+1.8 SD), driven almost entirely by new long buying following 5 weeks of continuous supply.

  • Financials & Software: Attracted notable net buying and relative strength ahead of Q3 bank earnings.

  • Consumer Staples & Biotech De-Grossing: Staples has been net sold in 7 of the last 8 weeks (97th percentile shorting, pushing its L/S ratio to 3rd percentile over 5 years). Biotech has experienced its largest 8-week percentage de-grossing in over 5 years.

MACRO HEADWINDS & DERIVATIVE HEDGING OPPORTUNITIES

• Rates & Yield Curve Asymmetry: Following the 10-Year Treasury yield breaking above 5.0% (currently hovering near 5.2–5.3%), GS Rates strategists view yield asymmetry as skewed toward lower rates, accompanied by a peak and reversal in interest rate volatility.

• Oil & Geopolitical Risk Premium: Brent crude moderation toward $90/bbl by December remains the baseline, but commodities strategists emphasize upside risks tied to $20+/bbl of geopolitical risk premium and Strait of Hormuz supply concerns.

• Nvidia (NVDA) Implied Volatility Anomaly:

  
  

  • Implied volatility for Nvidia (NVDA) downside options has dropped to levels not seen since prior to the COVID shock.

  • The desk identifies NVDA downside options as a compelling opportunity for portfolios seeking a cost-effective tail-risk hedge against an unwind in AI crowding or quality factor concentration.

SUMMARY TACTICAL DESK TRADE MATRIX