S&P500 Daily Action Areas & Price Targets 23/10/26 

***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 7800/10

WEEKLY RANGE RES 7851/22 SUP 7555/86

DAILY BULL BEAR ZONE 7710/20

GLOBEX RANGE SUP 7661/21  RES 7739/78

GAMMA FLIP 7720

DELTA FLIP 7780

CALL WALLS 7795

PUT WALLS 7677/36

GAP FILL 7775/7541

DAILY STRUCTURE - BALANCE - 7676/7812

WEEKLY STRUCTURE - BALANCE - 7897/7575

MONTHLY STRUCTURE - OTFH - 7542

VIX BULL BEAR ZONE 18.72  

VVIX-to-VIX The ratio of 5.67 compression is the main market driver, with the VVIX dropping more than the VIX, maintaining the ratio within the 5.0 to 6.0 range. This indicates a decrease in short-term tail risk insurance premiums, favouring volatility-selling strategies. Above 6.0 – 7.0+ signals higher risk and demand for options, reflecting market volatility concerns.

PRIMARY TRADES & TARGETS 

ACCEPTANCE ABOVE DBBZ TARGET GAP FILL

***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 1.23 (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: ACUTE HEDGE FUND DRAWDOWN & BREADTH-INDEX DISCONNECT

US equity markets experienced an exceptionally intense under-the-hood risk-off session. For the first time since the March 2020 COVID shock, all three major hedge fund style cohorts dropped by more than -1.0% in a single session: Fundamental Long/Short (-1.1%), Systematics (-1.2%), and Multi-Strategists (-1.4%). The GS Hedge Fund Positioning Pair (GSTHVIPP) plummeted -4.2%—its worst single-day move since 2011—extending its MTD decline to -10.4% as crowded long unwinds in Tech accelerated.

Despite the index-level pressure, internal market dispersion hit historic extremes: 155 S&P 500 constituents registered moves of $\ge 2.0\sigma$ (the highest count since the May 2025 US-China tariff truce). Concurrently, 335 S&P 500 names finished green on the day, marking one of the widest spreads between underlying market breadth and negative headline index performance since the 1990s.

KEY PERFORMANCE, RATES & THEMATIC DYNAMICS

  • 10-Year Treasury Yield Rally: US 10-Year yields plunged by ~15 bps—the largest single-day yield decline since August 2025—as AI growth concerns drove investors into duration assets. As desk strategists noted: "The very thing creating the equity problem is helping solve the rates problem." The 10Y yield closed below the CTA short-term threshold, triggering additional systematic bond-buying projections.

  • AI Basket Drawdown & High Beta Momentum:

    • The GS Pure AI Basket (GSTMTAIP) sits -23% below its June peak, matching the magnitude of the pullback observed prior to the July bounce.

    • High Beta Momentum (GSPRHIMO) has completely erased its YTD gains. Historically, momentum drawdowns of this scale have provided attractive entry points.

  • SPX ex-AI (SPXXAI) Outperformance: S&P 500 ex-AI has outperformed the market-cap S&P 500 by +6.0% MTD, closing its relative performance gap as 45% of S&P constituents exhibit negative beta to the benchmark.

INSTITUTIONAL FLOWS & EARNINGS WATCHLIST

  • Execution Floor Activity (9.6% Net Supply): Floor flows finished 9.6% better for sale overall, with zero offensive buying detected in AI themes.

    • Asset Managers (LOs): Finished ~20% better for sale, driven by concentrated supply in large-cap tech equities and index ETFs.

    • Hedge Funds (HFs): Finished 10% better for sale, led by long/short unwinds in semiconductors and hardware, alongside accelerated ETF short additions (2:1 short-to-long ratio).

  • Earnings Focus Shift: Following mixed post-earnings reactions in Meta (META) and Lam Research (LRCX), attention turned to Western Digital (WDC, +2% AH) ahead of next week's heavy megacap reporting wave.