S&P500 Daily Action Areas & Price Targets 5/11/26 

***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 7530/20

WEEKLY RANGE RES 7858 SUP 7521

DAILY BULL BEAR ZONE 7660/70

GLOBEX RANGE SUP 7686/54  RES 7750/82

GAMMA FLIP 7701

DELTA FLIP 7562

CALL WALLS 7735/65

PUT WALLS 7650

GAP FILL 7623

DAILY STRUCTURE - OTFH - 7679

WEEKLY STRUCTURE - OTFL - 7794

MONTHLY STRUCTURE - BALANCE - 7897/7542

VIX BULL BEAR ZONE 18.72  

VVIX-to-VIX The ratio of 5.44 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, favoring volatility-selling strategies. Above 6.0 – 7.0+ signals higher risk and demand for options due to market volatility concerns.

PRIMARY TRADES & TARGETS 

LONG ON REJECT/RECLAIM WBBZ TARGET RTH CLOSE

***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: POST-MIDTERM CLEARING EVENT UNLEASHES MASSIVE VOL CRUSH & POWERFUL CONSUMER SQUEEZE

US equities staged an explosive post-midterm reversal rally across all major benchmarks (S&P 500 +1.58% to 7,688; Dow Jones +3.03% to 53,356; Russell 2000 +1.51% to 2,854; Nasdaq-100 +0.91% to 28,437). President Donald Trump’s public acceptance of the midterm results removed a major left-tail geopolitical and constitutional risk overhang, triggering an immediate cross-asset relief bid.

The removal of the political risk premium sparked a steep collapse in commodity and rate pressures: WTI Crude plunged -7.82% to $88.57/bbl (Brent broke down through the key $95/bbl level), and the US 10-Year yield declined -7 bps to 4.88%.

Lower input costs, historically depressed positioning, and expectations of protected domestic social spending (e.g., SNAP programs in upcoming fiscal negotiations) funneled aggressive capital directly into Consumer:

  • The Retail basket (XRT) surged +5.5% on the day—outperforming the S&P 500 by +390 bps, marking the 2nd largest 1-day alpha outperformance in the last 2 years and lifting XRT to 5-year highs.

  • Consumer Staples (XLP) broke out to new all-time highs.

MARKET SUMMARY & ASSET BREAKDOWN

  • S&P 500 (SPX): Closed at 7,688.00 (+1.58%) | MOC $2.0B to SELL | VIX collapsed -19.54% to 16.76 | Remaining weekly straddle: 91 bps

  • Nasdaq-100 (NDX): Closed at 28,437.00 (+0.91%) | Lagged broad market due to persistent semiconductor supply

  • Russell 2000 (RUT): Closed at 2,854.00 (+1.51%) | Small-cap cyclicals bid up on duration relief (10Y @ 4.88%)

  • Dow Jones (DJI): Closed at 53,356.00 (+3.03%) | Major outperformance driven by heavyweights in Retail, Industrials, and Staples

  • US 10-Year Treasury: Yield down -7 bps to 4.88% | Decisive break below 4.90%

  • WTI Crude: Price down -7.82% to $88.57/bbl | Crushed below $90/bbl on post-election geopolitical de-escalation pricing

  • Gold: Price up +3.43% to $4,064.00/oz | Rebounded alongside USD weakening

  • Bitcoin: Price up +3.07% to $80,198.00 | Reclaimed the $80,000 threshold on risk-on appetite

  • US Dollar Index (DXY): Down -35 bps to 101.51 | Eased on the retreat in front-end yields

DESK FLOWS, BIFURCATION & LONG-ONLY CASH HOARDS

  • Execution Floor Activity (6/10 Rating):

    • Exchange volume was explosive, running 30%+ above the 20-day average at 21.73B shares.

    • Floor execution finished +2% better to buy, with Asset Managers and Hedge Funds finishing roughly balanced in aggregate.

  • Under-the-Hood Sector Bifurcation (Compute Owners vs. Builders):

    • The new political and regulatory landscape created clear divergence: Net buying in Hyperscalers vs. heavy supply in Semiconductors.

    • Desk Read: The election outcome is viewed as constructive for compute owners (hyperscalers) with fortress balance sheets, but headwind-heavy for those who build, power, or lever up data centers (neoclouds, semicap equipment, power/utility suppliers).

  • The Long-Only Cash Dynamic (John Flood Perspective):

    • Institutional accounts have endured difficult performance since July, with hedge fund net exposure sitting at historic lows.

    • Active Mutual Funds and Long-Only managers were forced to liquidate heavily ahead of the October 31 fiscal year-end tax-loss deadline (especially on Friday, October 30).

    • Consequently, the LO community is sitting on massive unallocated cash piles raised during the July and October sell-offs. With midterms serving as a clean clearing event, this un-deployed cash represents significant dry powder, though Flood cautions that the ultimate clearing event for 2026 remains tied to equity capital markets (ECM) supply absorption.

POST-BELL EARNINGS DIGESTION

  • Qualcomm (QCOM -4% AH): Reported solid top-line revenue guidance, but mixed EPS and EBIT performance led to post-market softness.

  • Zillow Group (ZG -22% AH): Dropped after posting clear misses across both revenue and Adjusted EBITDA.

  • AppLovin (APP +15% AH): Surged on an earnings beat accompanied by forward revenue and EBITDA guidance well above consensus bogeys.

DERIVATIVES & VOLATILITY: HISTORIC VOL REVERSION & DEALER GAMMA

  • Event Volatility Implosion: With election uncertainty out of the tape, implied volatility was crushed across the board. S&P December fixed-strike volatility declined by 1.2 vols, bringing short-dated OTM calls back under 11 vol.

  • Tail Hedge Monetization: Downside protection was dumped aggressively at the open. Over 530k VIX call options traded (predominantly sold) within the first hour alone.

  • Vol of Vol (VVIX) Flush: The VVIX index collapsed by -18 points at intraday lows, settling down -17 points on the day.

  • Return to Long Dealer Gamma: The sharp rally pushed market makers back into positive dealer gamma territory. However, desk strategists note that because topside implied volatility is already compressed, a continuation of the rally could see implied vol begin to "float" higher in tandem with spot (a topside convexity bid).

  • Flow Positioning: Volume was dominated by short covering and downside hedge unwinds rather than fresh levered long deployment, though airline upside calls saw restructuring (buying Dec call upside in UAL and DAL).

  • Desk Preference: The derivatives desk favors owning SPX options over NDX, as S&P implied volatility continues to screen as materially cheaper.

GIR MACRO TAKE: POST-MIDTERM FISCAL DYNAMICS

Goldman Sachs Global Investment Research emphasizes that the larger-than-expected Democratic House majority will:

  1. Provide Democratic leadership slightly greater leverage in fiscal negotiations with the White House.

  2. Dilute the influence of fringe congressional factions, enabling more pragmatic legislative horse-trading.

  3. Leverage upcoming fiscal statutory deadlines (such as the December 11 government funding deadline) to push for diplomatic limits on Middle East escalation, negotiate rollbacks on select tariffs (~2-point drag), and attempt to reverse prior spending cuts.