 Hey folks How's it going out there? Hey folks, how's it going out there? I hope everyone's having a good start to their trading day. What a doozy that CPI was, huh? We're gonna talk a little bit about that And quite a bit more as we fire off here. I want to thank you all for tuning in really appreciate it I'm gonna talk a little bit about CPI and then I'm gonna talk about what I see setting up in these markets If you'd like you can check out the YouTube stream of this on bookmaps YouTube. It's up pinned on my Twitter page here, so Presentation is called convergence as a compass because I like to use Different elements of what I'm seeing in market data to help guide my journey as a trader We're gonna start off talking about what we saw with CPI Is it heading the wrong way the month over month headline reading came up to point three percent After two months of point two percent in October at point one percent That's not really the direction we want to see this heading and it's likely why We saw Jerome Powell say hey, you know We need to see another six months of this data before we even think about Cutting rates like, you know at the last meeting he walked back a lot of those expectations that there was going to be this immediate cutting cycle happening from the Fed the market was pricing in at march Then may then june now i'm getting headlines saying that fed funds futures aren't pricing in That first cut until july which would pretty well correlate with what powell was saying needing another six months of data The data point we got today with cpi being hotter than expected Isn't what the fed wants to see now obviously the fed is not hyper focused on cpi. They're much more focused looking at You know pce what i like to call their favorite flavor of inflation So we'll have to see what the pce data says it's a little less weighted towards shelter Shelter was one of the the areas that drove up cpi today year over year that and transportation were the the biggest contributors And energy was one of the laggards right so we have to pay attention to what this looks like It's one month doesn't make a trend change, but it is still a question To consider as to whether or not inflation is heading the right way now when we look at goldman sacks is Expectations based on the core month over month data, which came in at 0.4 Their expectation is the s&p following by about three quarters of a percent right So that's something to take into consideration the s&p right now implied to have applied open is about down One and a quarter percent a little over that jp morgan was a little more bearish on a read Being down you know with with cpi at the core level month over month of Up 0.3 to 0.4 percent they assigned a probability of 22.5 percent to that outcome And they said that that could lead to the s&p falling 1 to 1.5 percent Which seems to maybe at least pre-market be a little bit more accurate versus what we're seeing right now in price discovery With the s&p down about 1.3 percent the naztac down about 1.8 percent as we get ready to start the trading day here Now one thing that's interesting you can see this chart on screen if you're watching on the youtube or the discord Is that bond liquidity is likely to worsen as inflation volatility is high So that's something to take into consideration in my opinion I I think that that's something that will likely see come back is that bond volatility Being another theme to keep an eye on that's the move index if you want to watch that So I believe that bond volatility will likely Begin to move higher not just here but around the world as we see inflation inflation data become a bit more volatile and that's something that plays a role in other forms of volatility currency volatility commodity volatility equity volatility there is a really really big short vol trade on right now If we do get enough pressure in and and that's to say upwards pressure in volatility that could unwind that trade Cause a lot of repurchasing back of those vol shorts and distribution of those equity longs That's something to take into consideration. It's probably the biggest it's ever been Now obviously we've had a market that just wants to keep moving higher and higher. So that hasn't yet been a concern But if we do see a bigger risk off move the likes of which maybe that's starting today Maybe there's a reassessment of the soft landing in the fed's Trajectory of rate cuts and all the cuts that were being priced in being discounted a bit Maybe we're seeing a little bit of that We're certainly seeing it in rates a 10 year up about 10 bits after that cpi data So something to take into consideration is we're watching volatility that bond market volatility suggests You know with inflation data becoming more volatile that that volatility In the bond market and other related markets could rise as well Now let's shift over to some better news before we go into the trading day First yesterday we saw broadening out of the number of nasdaq stocks making new highs in excess of new lows over 300 That's the highest we've seen Since well really since December if we're looking at it day over day if we look at it week over week It actually goes back all the way to late 2021 So that's a good sign We are seeing some of that broadening out the mega caps are rolling over yesterday But a lot of the rest of the market actually had a bit if you looked at the full market heat map yesterday There were a number of sectors that were green even though things weren't looking so good At the index level now today I'd guess is probably going to be more distributive across the board You know yesterday breath was almost 70 upside versus 30 downside today. I'm going to imagine there's a Fair bit more distribution a fair bit more selling just because this data Is going to likely cause a lot of folks whether they're investors or traders To recalculate some of their presumptions about the trajectory of disinflation How that affects the feds and their rates and then of course how that affects the risk appetite particularly in more risky parts of the market Which is one of the reasons that tech is lagging much more than the s and p because it's more rate sensitive overall Now another area of the nasdaq that I like looking at to give me a sense is breath and health of the rally Is the number of stocks above their 20 day moving average and that was a pretty decent print yesterday just about 58 percent of nasdaq stocks are above Their 20 day moving average. So that's a again a healthy sign Now if the mag five roll over you can still have most of the nasdaq up and the market down Right, so that's the other sort of caveat here is you could have this broadening out But if the big players don't just Participate in that broadening out it does become more complex and it may it looks more like a correction in time Or price even though there's this rotation to smaller factors Going on and different factors quite frankly going on underneath the surface in the market Now another area where there is some encouraging news going into today That may be reversed as a result of some of the data we're seeing pre-market Is the nasdaq mcloan oscillator which is showing a push into positive momentum and breadth again Which is encouraging but again given the backdrop of the data we got pre-market This is likely to not be a material factor as we go into today's trading day Which again looks like probably be a bit more distributive now This is all selling that's happened pre-market. So I don't want to give it too much weight We have to see how we trade in the cash session But I do think what we're seeing in the rates market is concerning as well because last week we got You know really three stellar bond auctions from the treasury And yet the rates market wanted to push higher After that and then today it got every excuse to push even higher from there We have seen a strong negative correlation between rates and equity performance And so that's something to take into consideration here for rates are rising That does put increasing pressure on stocks So let's take a look at what that means on this chart here. This is the nasdaq composite versus the tenure note What is that showing us it's showing us the tenure note is rolling over as the nasdaq is being bid Doesn't necessarily automatically mean the nasdaq has to come down But what it does mean is there's a increasing amount of pressure here Driven by rates It's becoming more attractive to look at fixed income these equity risk premiums are at some of the lowest levels We've seen in decades. So when you honestly assess the risk you're taking buying stocks at these loft evaluations Likely is the case you're going to find that it's not necessarily the most attractive proposition that there's a lot of risk being taken buying at these levels Now this is the trader aid nasdaq Momentum oscillator. This is something where I put a few factors in it's been eerily accurate In finding both rallies to buy for swing trades and then where to sell and potentially look at fading these rallies And it's now in fade mode So this is telling me and again, it's been like silly accurate. It's usually a little early But it's silly accurate in terms of the trend This is telling me it's time to reassess Long positions in the nasdaq on a swing basis now if you're a long-term investor This is all noise, right? But if you're shorter term if you're a trader you're looking at momentum and deciding how you're going to allocate Well, this is telling us momentum is turning against us and and I think that's something that's important to take into consideration here As we're watching How the rest of uh, february plays out because february seasonality is the second worst for tech stocks right And it's the second half of february where that really becomes more difficult So just something to take into consideration as we're going overall this information is seasonality could play a role here We are in op-ex week tomorrow is vixperation friday is options expiration typically from thursday on You have the lack of that benefit from those passive flows because if you think about how people are hedging their positions in markets You know if institutions are going in and they're buying s and p puts it's like one of the most liquid markets To hedge exposure when they buy s and p puts that elevates the skew or the distribution of premium towards puts in a way from calls When that puts skew rises You get these passive flows that bid up the market pre op-ex that decay of theta that decay or that theta decay that delta decay Drives dealers because the options are now lower and lower delta to distribute some of those S and p shorts what that means is they're buying back the shorts. It's adding liquidity to the market Right, so that's net positive But as of thursday this week that stops So that that implied buffer of downside and that gentle pull to the upside is no longer going to be a thing That definitely increases risk. So something to take into consideration skew is pretty elevated put skew on the s and p is pretty elevated Today tomorrow that could help to buffer some of the downside particularly in the first and last hour of trading We might see like a bit of a reflexive bid as a result of some of those dealers on winding hedges But I think as we get later into this week thursday and on and going into next week We're not going to have that support and that could become a bit more problematic But we've got about 17 minutes left until the open So i'm going to try to get through the rest of these slides before then and then we're going to go right In the book map and we're going to live watch the flows of liquidity And options and everything else in a variety of different markets including the s and p the nasdaq oil bonds and Some of the currencies that I like to watch. So that should be pretty fun On screen, we have non-dealers u.s equity futures positioning This is from goldman's prime desk and what it's showing us is that folks are really really really really really long Did I say really long? I think I might have mentioned that It's a bit of a concern because it does beg the question who else is left To get long when folks are so concentrated on the long side Now you could look at money markets and say but there's six trillion There's like record cash on the sidelines, but the question with that record cash is what is its intent? Because a lot of that cash is from older savers who are looking for fixed income and from corporates Looking for a yield on that cash and their treasury These aren't folks that are just eager to jump into the stock market In fact, most of the wealth concentration in the u.s if we if we go outside of you know Different buckets like the top 25 percent if we just look at it by demographics such as age It's concentrated in boomers right boomers have most of the wealth in terms of an age contingent That's important to take into consideration Because that definitely has a major major impact on what the risk appetite is If you're older and you've made a bunch of money and you have enough money to retire on it concurrent interest rates You know, you're yielding four five six percent. Why would you go into equities? What would be the point? I mean, maybe you're buying some safe dividend stocks But I think a lot more folks are looking at risk-free returns as being very attractive So when you look at that six trillion on the sidelines and money markets, I would contextualize it is I don't know if that that mark that uh money is just anxiously anticipating When that buy the dip opportunity is in stocks it may be looking for that but in rates in fixed income instead So this very long positioning long story short it increases the risk a little bit And it's across different models. You look at cta systematic, um, you know positioning from rate Funds volatility management funds basically all the folks that are out there that are much more systematic and how they allocate Are close to if not max long And so if you do get a meaningful drawdown goldman's talking about 4817 being a pretty pivotal level And that's a ways away from where we are right now But if you do get that kind of a drawdown that selling could lead to more selling That downward momentum could lead to the distribution of a lot of these positions that have been accumulated at or near all-time highs Now if we look at hedge funds, we're looking at their gross leverage here The overall book according to goldman's sacks gross leverage is about 265 This is really really high leverage and the reason it matters Is because it's not as if hedge funds are perfectly hedged on their deltas, right? If you consider their long positioning being very very concentrated in big tech and nasdaq overall And their short positioning being very concentrated in some of the single stocks that have, you know ridiculous amounts of short interest 20 30 40 percent And then also macro products like russell arc xbi, etc This is why you have that mismatch Because you know the nasdaq and their shorts aren't going to always move in the same direction There are going to be days where the nasdaqs down Like today and then some of their shorts may actually get a bid because what they're doing is they're flattening out Both sides of their book they're closing out some shorts So they're buying them back giving them a little bit of a bid But they're also closing out some of those longs getting out of mag seven Getting out of equity futures, particularly in the nasdaq and that can add to volatility So why am I showing this chart of hedge fund leverage being so high because it's a volatility catalyst when you have So much vol suppression and vol selling and yet you have this kind of positioning It does make me want to consider, you know, raising capital hedging whatever is most appropriate for one situation Because things are a bit stretched Speaking of stretched on screen flows into technology equity funds the highest We've ever seen them and continuing to pour in even as this market hits all time highs Now we have seen some institutional selling on the other side of it You've seen some larger institutions actually selling into recent strength But you have hedge funds corporate and retail buying in to these all time highs heavily in technology Next chart's from bank of america showing the allocation to tech is the highest since august of 2020 So that's another area to again take into consideration that there's a lot of concentration here Most bull markets are led by small caps and equal weight from the bear lows This has been led by about five stocks So it's a lot different than what we're used to seeing and a lot of that concentration is in tech When we look at skew puts put call skew something i've been talking about a lot over the last several weeks Is you know, people are very very very very bullish on the mag seven and on nvidia This put call skew is extremely stretched now as we go into options expiration week It's a bit of a offset of the s and p put skew, right with put skew You've got the the Value of puts eroding over time causing dealers to buy back those hedges that adds liquidity to the market If you have really strong call skew on single stocks that are very popular and they're you know highly traded Then you have an offsetting effect because as those calls lose value heading into op-ex Dealers are going to remove their hedges for that which was long shares Which means they're selling shares of things like nvidia meta microsoft google as those Calls lose value approaching op-ex you get a little bit of a distribution of outcomes now obviously s and p Indexed options are much bigger So the primary flow is supportive But there is still that distributive flow from this imbalance towards call skew on these mag six stocks It's just something to take into consideration in my opinion Things are very very very wildly stretched there as we see here this chart from doitia bank showing mega cap and Tech mega cap growth and tech positioning is close to recent highs It's climbing back up. It's not towards those all-time highs we saw in 2020 and 2021, but it's still stretched It's still at the like 90th percentile So something to take into consideration again the concentration there i'm more in favor if i'm going to be swing trading Looking at lesser love parts of the market than the ones that everyone is in And the five largest companies as you share the s and p 500 are for the first time at 26 percent Of the s and p 500 five companies make up over a quarter. So when you when you throw a dollar into the s and p 26 cents goes to five companies And then the the other 495 are going to fight over the 74 sets by market cap waiting. That's pretty incredible Now speaking of lesser love parts of the market. Here's energy on screen hedge funds hate energy They don't want anything to do with energy yet Oil continues to rally and there have been some impressive players in this space worth watching as well So I think looking at the other side of this trade some of the higher quality components in the energy space actually looks really interesting Because the allocation of energy is so low that if we do see a turning point a lot of these companies are objectively very cheap They could rally quite a bit as we see institutions try to catch up to the allocation levels. They should have 10 minutes from the open. So we're going to get through just another six charts here s and p futures liquidity is improving This is a great sign. This is exactly what we've wanted to see For some time Because we had some really illiquid days and when there's less Order book depth on the s and p it means it takes less volume to move the market all over the place You get more slippage when you're trading just not ideal. So when liquidity is lower I take smaller position sizes and widen my stops when it starts to improve the opposite I can increase my position sizes And I can make my stops tighter and that's the environment we're in now Now if we look at the s and p 500 options positioning on screen, we've got the trader aid gamma model We can see 5 000 just became big resistance as we're looking at an implied open on the s and p of 49 57 Okay, so that's that's taking us about 44 handles below that key level Could we get drawn back up into it given how enormous that option's positioning is? Absolutely, but it may act as an important level of resistance. So something to take into consideration now I like to look at these options In real time as the market's trading and I have Functionality now built into book map that allows us to do that as well So as we trade today, we'll be taking a look at that. It'll be a lot of fun to take a look at the spx options visualizer On screen here, we have the s and p 500 futures contract the e-mini And it's actually this was taken just a little bit before the presentation, obviously It's plunging below these current levels here at this time I would look at 49 54 25 as a key level potential support to watch and then 49 80 75 as a level resistance to watch if we're able to break above that resistance You can see where the point of control is on this chart. It's just about the same place as s and p 5000 on cash Right, so it's pretty important to take a look at these levels They're all mapped out on screen if you want to know them take a screenshot or whatever this goes back several weeks Of price action all these levels of potential support below All right next up. We have the nazak Similar look here We are trading below the point of control pre market. We're a little bit lower I'm looking at 17 585 50 and 17 484 potential levels of key support today and 17 7 67 25 and the point of control at 17 8 50 as areas of potential resistance in the nazak futures contract Now we're going to zoom out a little bit. We're going to look at oil which is back in an uptrend It's above my key pivot level of 76 and building. This is another reason. I like energy stocks. You can see it right on screen oil is clearly making higher lows Looks like it put it's it's getting ready to potentially make a higher high But recently it made a higher high as well before the more recent higher low drawdown RSI is over 50 We see overall constructive conditions here and we're pushing above this huge chunky area of the volume profile Meaning we could actually start to really make a push the next level of resistance. I'm looking at in crude is 79 80 Now we've got the tenure note futures on screen. This is Rolling over on account of cpi data coming in hotter than expected And I think that we are in a downtrend now of futures prices in tenure notes Which means we're in an uptrend in rates and those rates having a negative correlation with equities likely means There could be some more pressure for the market here. I'm looking at 109 01 as a potential level of support here that we could get a bounce And that's right around where we start to see the volume profile rebuild Last chart before we dive into book map just five minutes ahead of the open is the dollar breaking out this morning That's another thing that could put some pressure on equities here, but the green back is strong It's really got a strong positive correlation with tenure rates. So when you see the tenure note Falling when you see tenure yields rising the dollar is often going to rise as well And this breakout above the point of control gives the green back room to move higher So let's dive in to book map here. I have that on screen Hopefully you all can see it This is the s and p 500 e mini futures contract. We're going to zoom out just a little bit Let's see. There's a large resting offer above us just about 50 10 And we're been trading and testing the potential support of this second largest gamma level and uh, just Looking at the futures market here pre open Russell is down 3.3 percent So it's even getting hit harder than the nasdaq or the s and p by quite a bit Let's down about Double of the nasdaq on the russell. So small caps getting Annihilated they tend to be pretty rate sensitive particularly the growth factor of the russell which you can track with the etf IWO But increasingly the regional banks in the russell are very rate sensitive as well Remember, there's that whole debacle with commercial real estate and some of their assets losing value as rates rise That continues to be a concern Let's look around the market a little bit. I'm going to zoom in on the s and p contract Just because things don't tend to be moving around too much until we get to the bell Let's look at the nasdaq here nasdaq much choppier. I like to call this my high beta beast And it's living up to its name. We are well below the point of control here But we seem to be stabilizing ahead of the opening bell oil pretty much a sideways trade but I would say this thing has an upward bias based on what we talked about in the prior chart To your note futures. Let's see what we can see here. Look at that drop. Wow A huge amount of stops getting run there too that to your note push out This is this has to do with more and more folks recalibrating their expectations of how much the fed is going to cut and when they're going to cut So this drop is really important and it's part of a trend The to your note futures have been rolling over for quite some time And it's telling us in no uncertain terms the market is too It's it's basically thinking the dove is going to be way or the feds going to be way more dovish than they likely are to be Here's the 10-year note futures. This is one that I talked about on twitter earlier when it made that dramatic move We filled in some resting liquidity down there Which is one of the reason reasons that I love watching these heat maps because you get an idea of what the implied move may be Based on positioning from other traders And then we've got the 30-year bond futures here similar move just every single futures contract for rates Dropped significantly. These moves are big. These are really big moves that we're seeing here. So they do matter Gold I'm going to imagine also had a nice little drop this morning. Yeah, look at that and just keeps coming down Right point of controls being pulled lower by sellers as well, which is pretty bearish Here's the euro. It's recovering off its lows But again, like the rest of these bonds just this huge drop Into that release and then finally we're going to take a look at the japanese yen and i'm going to imagine it's the same look Yep, just a big old drop into that release. So overall rates up dollar up vol up stocks down A re-rating of where we are in the disinflation story Having a pretty big impact On price discovery this morning God just less than two minutes before the open And we're watching how this market reacts to hotter than expected cpi data We also got redbook data year over year came in At 2.5 percent, which was quite a bit lower in the prior reading of 6.1 percent Goldman Sachs now anticipates the first rate cut by the Fed to occur around mid-year Opening bell is approaching imminently here We're going to be watching the s&p and the nasdaq most closely during that opening bell and that 20 minute range afterwards That opening range is pretty important to determining the trend directionality now I will put in a really big caveat there This is op-ex week So a lot of the rules that we may follow as traders don't work as well statistical probabilities break down a bit on op-ex week We are now at the open With an imbalance of 300 million to the sell side Sorry about that. I do occasionally pause to catch my breath here. So Essentially just building a little bit above this point of control here. We saw liquidity differential get pretty positive And I mentioned that and we saw this low volume bid off of that absorption But it's not showing much conviction here of yet Still kind of giving this thing a a little bit of time to shake out again I like to look at the 20 minute opening range here To get a sense as to where the trend may be and then I like to see some confirmation from Positioning both where people want to be and where some of the options flows are going But it wouldn't be terribly surprising for the first hour of trade to Have the market take a little back from those losses because of how much Passive flows there are to rebid this thing and I think that's part of what we're seeing here This sort of low volume passive flow bid from dealers repositioning as there is elevated skew We are in op-ex week and those flows tend to intensify It looks like we're getting closer to view app here. Perhaps we give that a bit of a test We do see some liquidity building above us here, which tends to be bullish Let's take a look at the nasdaq. It's struggling a little bit more than the spoo's here, but This is one I really want to watch for leading the way I don't like to see the nasdaq be the laggard if I want to be bullish And folks if you missed the introduction where I did about a 30 minute presentation You can find that on youtube on bookmaps youtube. It'll be under their live streams We do see s and p now testing that view app level nasdaq heading towards a little more volume in the nasdaq now It's not a very liquid trading vehicle though. Look at the the order book depth is is generally pretty thin on the nasdaq So it tends to be more volatile Which is one reason why when trading nasdaq smaller position sizing is Smart if you're used to trading s and p because nasdaq tends to be quite a bit more volatile in today Oil still continues to chop sideways here not a lot to see just sort of hugging the point of control Similar looking rates here not a lot of action in the tenure note future There's no real catalyst for that at this point as well really the event volatility catalyst is behind us Gold coming off its lows, but possibly making a lower high here guilty until proven innocent is what I like to say on these micro trends And still plugging away at view app here Still seeing some selling underneath the surface here. So at this point buyers are being absorbed a little bit Nasdaq looks a little bit more like demand is coming back to it with what we're seeing with cumulative volume delta Yeah, it's about gold just cross below 2000 for the first time since december 13th I just heard over the wire. So that's interesting And I think even though there's this sort of idea that rates don't matter You know that much for gold or even for stocks. I I take the opposite view I think we had this sort of brief departure that engendered that sort of unhealthy thinking I still think rates are a big competitor to gold because you know, you can go and buy something that has yield Versus, you know, and I look I have gold. I'm not going to say I'm not I'm anti gold I I collect a little bit of physical gold. It's there for a rainy day. I just don't think it's like This ultimate hedge against inflation. I think it's more of a hedge against uncertainty And I think if we look at gold basically not trading much above where it was in 2011 And most of the surges in gold having to do a more more with like geopolitical or economic uncertainty than inflation That kind of tells the story So we are seeing a rejection there at view app. Look at that test. That was a clean test and reject See what the nasdaq's telling us not quite there yet still testing But today it looks like the s&p is the momentum leader so far more distribution CVD now Going below 11,000 negative 11,700 Not as much absorption by buyers at this point Now don't get me wrong. The selling here isn't yet with a lot of conviction But it's still overwhelming the buyers if you look at markets, it's kind of a continuous Two-way auction process. You've got three phases, right? You've got the imbalance towards demand, which means prices go up until that demand stops, right? Before it as the markets get expensive that discourages demand You've got too much supply where selling continues until that supply exhausts And then you've got balance, right where both sides are kind of evenly matched So going into today's session there is still Likely too much supply. You do have that passive demand from the flows we talked about Right those s&p 500 options Decay flows particularly on the put side given where skew is But it looks like there's still folks out there that that are interested in taking some profits Lightning up putting on some hedges and that's some of what we're seeing We should get options data on screen pretty soon for the Intraday flows the real-time session flows. We're just waiting for those flows to build up We can see however that This this gamma flip level that we're calculating here is above us and it coincides with some resting liquidity As does the second largest level of gross gamma positioning Coincides with a bit of liquidity as well. We do often see this across the options market where you have these areas of Large options positioning or otherwise that are important where there is a convergence of resting liquidity in es So to be clear what we're really looking at is the s&p 500 index where the vast majority of options trading happens And there's about 1.2 trillion of notional traded every single day that has a big impact In es because most of dealer hedging is happening in es right? So the impacts of s&p options positioning is often realized in es Sure, so i'm taking cvd over a sample period that matches the window on screen. So it's about uh about like a 30 minute period And what i'm showing is the cumulative volume delta during that period right so over the last 30 minutes There has been 13,300 more sales of s&p 500 futures contracts than buys Right, that's the the sort of the excess volume is more on the sell side And so that in balance helps me when i'm contextualizing it looking at some of these other factors like when you see a really heavy cvd And you see price coming down if liquidity differential starts to spike to the positive side You start to get a sense that maybe on a scalp trade time frame There's some absorption there Similarly if you start to see icebergs come in in the thousands that gives me a much more high conviction clue that there's Institutional absorption. We don't see either of those right now. We're now just cutting right through on higher volume Now the point of control we got rejected at vwap and it looks like we're coming down to the second key gross gamma level So i look at cvd really is just sort of like a short term window into the appetite of the market Where they're you know going back to auction theory which party is in control and when you see a cvd that low It just tells me that you know, there's more supply than demand And a little bit of balance at that point of control here. We do see some liquidity building below us Pretty significant chunks of resting bids below. We also see some resting offers coming in above So this is a pretty liquid trading book so far in the s&p futures We talked about that a little bit pre market that we saw liquidity improving and we can see it today Now overall what this tends to do is sort of diminish the range of price outcomes to this range that we're seeing on screen That is to say as liquidity drops off. There's not as much interest So you know looking at uh 49 95 as the top of interest and 49 57 being the bottom of interest at least gives us a sense in a short time frame Right, obviously not the whole day, but over the next half hour to an hour where there's the most interest in price outcomes Nasdaq you don't see that same amount of interest and I think it has everything to do with it being a thinner vehicle But also less options trading Ndx as an options complex is a completely different beast than spx More and as that options trading actually happens in the triple q than ndx Or um the nq futures So I will be working on another options model for the nq, but it'll be based off of triple q ndx and nq options to get a composite That'll be coming later, but the uh spx options visualizer is available now on the book map marketplace We do see a little bit of iceberging here, you know, you saw that 200 lot by Not enough to really catch my attention, but a little bit of institutional absorption there, right Crude falling off a cliff here below the point of control below view app. Nice. It'll move lower there falling about 50 cents Rates getting a little bit of a bid and what I mean by that is the price of notes coming up here on twos and tens and thirties That likely would give uh the euro maybe a little bit of a bid It should give gold a little bit of a bid And you would think it would give the yen a little bit of a bid as well with rates coming off So it's 15 minutes left on my session. I do these every tuesday 9am eastern So add me to your calendar. I really do recommend subscribing to the book map youtube They have a lot of great content on there a lot of educational content, particularly if you're using book map to trade Which i'm using it every day even if i'm not trading every day I love watching the liquidity and then with my options visualizer the flows and positioning So troy asks, how are you identifying icebergs? And how should you think about that in terms of scalp trades in today? I love that question because it really gets at the heart of some of the things we see on screen that can be really helpful So the icebergs indicator is part of book maps mbo plugin and you do need rhythmic data to use it, but I like it because The reason that you know you're seeing icebergs is someone really really big wants to hide the total size of what order they want to execute right And if it's a large enough iceberg and I really look at like just to keep it simple a thousand as a baseline Then if you start to see those iceberg prints They can mark a turning point. So for example, we've had distributive pressure today, right pretty good selling particularly pre-market coming into today So if I saw a lot of iceberg buying Into attempts by sellers to push this thing lower And those icebergs are absorbing all those sellers and then the sellers start to give up They become exhausted and we start to push higher That would be a really big sign to me Especially if during that downward move you had a lot of the momentum traders getting stopped out Right. So what I like to see is on the sub chart. You can see this blue line. That's the iceberg Over like 30 minute time frame indicator and then I also have this radial dial showing icebergs What I and then and then finally on chart, right? You've got this iceberg indicator below below where price is transacting. Where are the markets transacting? That 200 below means there's a buy you can see it confirmed by the sub chart and when it was happening You would see it on the radial So if I was seeing those buy the thousands into a drawdown and then we start to see price reverse And we have other areas that help to confirm that let's say for example You know the hot call is the most active call on the most active option on the chain I'm going to start to say well looks like the market is rebalancing and again if we're looking at this as a two-way auction Or start we would in that scenario that hypothetical Where the icebergs are coming in and options buyers are getting more aggressive on the calls That would tell me buyers are taking control of the auction that demand is now imbalanced and we're likely to head higher And then I would start to map the areas where we could head to Based on where there are large areas of resting liquidity like we can see here As well as where that hot call is transacting now if you're fortunate enough to see the convergence between the hot call And a large area of resting liquidity on the offer side Boom that would be my exit minus one or two handles I'm not going to get greedy and go for the exact price because it doesn't always get there I have back tested this and I find it's much more consistent to just look at that area And then subtract one or two handles from yes, and you're more likely to get the fill So it's it can work really well the icebergs to spot times where there's conviction From these passive accumulators and they're big enough in size that they can change the auction Dynamics, but you do need to see the conviction. And so for me, I want to see thousands I want to see enough icebergs that it scares the sellers If you see that kind of scenario, then you're more likely to have that reversal particularly again If the hot call from the spx options visualizer is the most active options on the chain and it's building Yeah, you're you're absolutely welcome. I hope that answer helps folks out there kind of Learn a little bit more about how we're using these tools now. We can see on screen We do have some of these levels populating the hot call the hot put the warm call the warm put So what are those mean? What what what are those labels mean for folks out there that are looking at this or hearing about it and haven't seen it before Hot is the most active strike Warm is the second most active strike So we're mapping the four most active strikes on the chain in terms of the puts and the calls in spx And we're doing that because spx options trading is really the tail that wags the dog That is the equity market So when we get a better sense as to how people are trading these options And we visualize it in book map where we can see where there's liquidity That's been transacted under the session volume profile and wants to transact Under the current order book. We can start to get a sense as to where price might be heading for example right now You can see there's a fair amount of resting bids building below us and offers Disappearing or moving lower above us that tends to be bearish You tend to get continuation lower those resting bids tend to act a bit like a magnet again going back to auction theory This is where the market wants to transact So you've got folks out here saying hey, i'm a buyer at this price And often is the case the markets if it's trending that way it's going to continue trending that way And if we're looking at this as a 20 minute opening range, we're breaking the downside, right? So we've now broken out of the range to the downside which suggests We're in a downwardly trending day. It gives the advantage on a statistical basis to sellers for continuation I would put one big flashing red neon sign caveat in there. It's op x week these things don't work as well on op x week And we are testing the most The largest area of gross gamma positioning outside Of what's going to be the vol trigger Right, so we see the midpoint and gamma one at the same level you see liquidity building below I would say the level we're at right now is pretty important if we cut below it I could I could easily see us falling another hand 10 handles on s and p Yeah book maps coding is awesome I've I've met some of their developers and they're awesome people too like I've had an hour long conversation with one of the people that makes this product And i'm extremely impressed with how good they are at programming and they're acumen And putting all this stuff together because when I was writing my plugin I was asking you know, hey, how do I you know do x y and z so that we can make this available? And he just had every answer and he gave like a real-time presentation So the folks behind book map are also really really awesome It's a great platform That's why you know this plugin which i'll be releasing for other charting platforms as time goes on I started with book map because we have a strong partnership with them We've been working with them for over two years. We like the people there. We love the product And you know, I'm not even trying to sell it. I'm just saying It is what I use, you know If you do want it on a discount, you can get it up to 40 off by going to trade area dot com slash book map So pretty good discount at trade area dot com slash book map scroll down to the specials And you can check it out at a pretty good price. I would say So here we are crossing below gamma one and then pushing back up into it Right This is now become resistance We do see a little bit of iceberging 83 icebergs here two there three now, but it's still not very convincing of yet For buyers to take back control of the market narrative here We need to push above vwap one thing I do notice however is you got a large resting offer there at 49 90 that just appeared 421 contracts It had been there earlier in lesser size Now let's take a look at what the options are telling us here, too So the most active put strike is quite a bit lower here The most active call is the most active options on the chain But there are more puts being transacted than calls and that's why we have a plus Rather than an asterisk on that hot call We're just testing the point of control now here from below Now the cool thing about the options data here is it's it's updated in near time So we're pulling in like almost 10,000 different data points across the entire spx options Market and just taking that data and modeling it out and updating it every minute So there's no other system out there that does exactly this It's pretty neat in that sense and it it ends up being pretty helpful for folks like me that are trying to figure out where there Are better entries and exits how I can manage my risk what the opinion of larger traders that are trading this market is It adds to my information profile without creating analysis paralysis like it's not too much information It's just enough to give me some idea of convergence and convergence builds confidence in the way I trade So I've got about three minutes left on the stream. I really hope everyone enjoyed what I've been showing today It's been a lot of fun to join you all I'll be doing these every Tuesday at 9 a.m. Eastern. So feel free to join me You can follow me on twitter at mayhem for markets. I've also got a youtube under the same name mayhem number four markets I really do recommend following book map on twitter and their youtube as well I think their product is really awesome and you you know, this is beyond Just the s&p futures and the other futures contracts i've been showing here Right, you can see more and by the way the naztac looks a lot more bullish in the s&p here. So maybe that's a sign But I like it because you can view stocks. You can view, you know Currencies you can view crypto you can pretty much view all these different markets and book map You can completely customize your chart if you don't prefer the bubbles You can use candlesticks But I this platform gives us so much valuable information and the cool thing is that because it's it's well Built for third party participation. You can build on functionality So you can build like if there's a future you want that doesn't exist yet You can build it and you can build it in python or java or whatever you prefer So again naztac looking a bit more bullish here than the s&p I do like to see the naztac lead the way with momentum crossing above the point of control and view app here We do see a little liquidity building up around 17,700 Crude a little bit of a pop hit view app and bounce lower this intraday view app Everyone that is trading intraday should have this on their chart Because intraday view app is an incredibly important indicator You can see how much today it's been valuable just watching for where buyers and sellers are in favor Gold getting a little bit off these lows, but just looking pretty nasty in the gold contract overall today And rates moving back higher after that that little reprieve So if you want to learn more about the work I do check out traderade.com check out macro visor.com Traderade is all about helping folks sharpen their trading edge We've got tools education trading ideas coaching and then macro visor We're talking about turning macro and momentum into opportunity for longer term swing trades and investment ideas And definitely check out the folks over at bookmap on their twitter and their youtube great content They're sharing regularly. I appreciate everyone tuning in. I hope you learned something today If you have any questions for me feel free to respond to the spaces Send me an email. Um, you can always reach out to me via traderade There's a contact form right on the website and check out my new tool the spx options visualizer now live on the bookmap marketplace And if you want a great deal on bookmap, you can get up to 40 off go to bookmap go to traderade.com slash bookmap That's traderade.com slash bookmap and for my tool traderade.com slash spx That's traderade.com slash spx. Thank you everyone again for tuning in I'll catch you next time