 Hello, everyone. Welcome to Options with Doug. Streaming live on Bookmap Discord as well as the Bookmap YouTube channel daily at 1.30 p.m. Eastern time. Before I go any further, let me go over the Disclosures. All Bookmap limited materials, information, and presentations are for educational purposes only and should not be considered specific investment advice nor recommendations. Risk Disclosure, trading futures, equities, and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. And let me remind you, my presentation and the channel, my channel in Bookmap Discord, Options with Doug, is a very focused channel. And the focus is options, order flow, the impact of options markets on stocks and futures, and the influence of market maker hedging flow on price action. I have a two-step process for trading. The first is planning and that is based on positional analysis. Other traders use fundamental analysis or technical analysis. I use positional analysis. And what that means is I look at how traders and market makers are positioned in the options market and how those levels change from day to day. So that's my planning process that happens before the market opens. And then after the market opens, step two is execution. And I look at real-time order flow in Bookmap and market maker hedging flow in Spot Gama Hero to make trading decisions. So planning first, positional analysis, I use that to develop a thesis for the day. The thesis is regarding volatility, what's the expected range for the day, and also a directional bias. And then execution, I confirm that thesis with real-time order flow in Bookmap and again market maker hedging flow. And I confirm my thesis and make trading decisions based on what I see in those tools. And questions and comments are very welcome and on topic questions and comments. Again, questions and comments related to what I'm presenting as well as the topics that I just talked about. Okay. So first of all, I want to talk about the news just a bit and let me just check. YouTube, everything looks okay. Again, those folks watching on YouTube, please post your questions and comments. And I encourage you to consider joining Bookmap Discord. I post a lot of information there as well as other traders. Okay. So, of course, the big news for today was the CPI report that came out at 8.30 Eastern time. And you could look at that and the way I look at it is it was not as bad as expected. So this is the data and it looks like every data point came in slightly lower than forecast. And the market jumped up, rocketed up, pre-market and has been moving ever since. So I'll talk about that in detail and give a good explanation for that in terms of the options market. So that was the big news today. So remember yesterday I said we were in the column before the storm. So now the storm has started CPI today. The FOMC meeting concludes tomorrow. And the announcement is at 2 p.m. Eastern time and then the press conference begins at 2.30 p.m. Eastern time. And then there's retail sales on Thursday and finally the big monthly and quarterly December options expiration on Friday. Okay. Let's take a look at some data now. And let me go to book map. Let's go take a look at ES here. S&P 500 futures. On a day like today, there's only so much you can do with your pre-market planning when there's such a strong, violent move based on the data before the RTH opened. Again, there's only so much you can do. But the support and resistance levels, all the key levels are shown on my chart here, the levels that are in play today. So it looks like the resistance levels that were noted in the Spot Gamma, AM Founders note have acted somewhat as support, but now should begin to act as resistance again. And also, again, regarding pre-market planning and looking at shifts and levels, there's only so much that you can do. So just a couple of notes. I talked about the levels that I look at yesterday and I showed a spreadsheet from yesterday. And again, I'm writing this information down in my training journal, my notebook every day, so I can just flip back in any previous day and see where the levels were. So today, the volatility trigger for SBX and SPY both dropped lower. The volatility trigger is Spot Gamma's gamma flip level. Below, market makers are in a negative gamma position. That means they have to trade, they have to hedge their delta exposure with price and above, they're in a positive gamma part of the gamma curve and they have to sell the underlying or sell futures to hedge their delta exposure as price rises or as price increases. So below, they're trading with price and above, they're trading against price. And then also the SBX and SPY callwall drop down, callwalls drop down. And that is the level with the highest net positive gamma. And also the QQQ, the volatility trigger dropped as well as the putwall. So that information is, I guess, slightly bullish, but again, it doesn't matter as much. There's more important information that we can take a look at. And that information, let's take a look at that now. And that information is gamma notional. And this is the market makers position on the gamma curve. So what I'm looking at is the gamma notional for SPX here on the left and gamma notional for SPY on the right. And these levels have become more positive since yesterday. And so yesterday, gamma notional for SPX was minus 364. So a pretty significant shift towards positive. And for SPY, gamma notional yesterday was minus 1113. So again, a pretty significant shift towards positive for SPY. Still negative gamma, but much more neutral. And that is very important information for today. And that helps to explain the big reversal today, at least in my mind. And the one easy way of looking at it at that is there really was not much, if any, fuel for a Vanna rally. And that happens when traders have a very large position of puts. They own a lot of puts. And market makers are short puts. And as implied volatility drops, their puts begin to lose value. And they can buy back their short hedges. And if you recall the last CPI report, gamma notional for SPY was much more negative. I think it was like minus 1700, minus 1800, something like that. So again, that's the market makers position on the gamma curve. And as implied volatility dropped, they could buy back their short hedges. And that is very powerful fuel that can really spark a rally. So today, that fuel wasn't there. And let's also take a look at the Vanna model. And this is for ESSPX. And what this is showing is how market makers delta exposure changes with changes in price, implied volatility, and that's shown by the green line. And then as time passes to the next expiration, and that is shown by the black line. So the green line is showing the Vanna effect and the black line, the charm effect. So the way to interpret this is you can just draw a line here. And this is almost neutral. So this indicates that, let's just look at shifts from previous days. So here yesterday, again, gamma notional was much more negative. And this meant that market makers would have to sell futures as price decreases and buy futures as price increases to hedge their delta exposure. So that condition has really become much more neutral. The same for spy. So let's take a look at one other thing here. Let's look at the S&P 500 charts. And we'll start with ESSPX. And the way I interpret this is there is a pretty equal balance of puts below this 4,000 level. That's the key gamma strike, the strike with the largest absolute or net gamma. And then above that level, a pretty equal distribution of calls. So a pretty neutral environment. And the same for spy. Let's zoom in on this chart just a little bit. So again, it looks like a pretty equal distribution of puts below this 400 level and calls above. And then finally, I want to talk. This was in the, this is a note that was in the spot gamma AM founders note. And I'll leave this up. It's really important information that would indicate the expectation for what happened today rather than a typical Vanna rally, you know, put field rally. So again, normally people associate the decline in implied volatility with a market tailwind, the Vanna rally. And that is generally strongest input heavy environments. So like I talked about, when puts decline in value, market makers can buy back their short hedges. But that environment, this was not a really not, not significantly put heavy environment today. So in this case, there is a very neutral call put positioning. Like we've seen with the the S&P 500 gamma levels charts, the Vanna model, the close to neutral values for gamma notional. And there's this idea that a right tail move is just as high as a left tail move. So that I think the probability of that kind of move. And so spot gamma was indicating we, we think this drop in implied volatility starting with CPI serves to drain the momentum off of an equity move, both higher or lower. And recall, I posted in Bookmap Discord Chat the options chain for SPX. I posted this last night showing the high levels of implied volatility for every day this week. And let's just take a look at that now. So this is SPX for today. Let me just open this up so I get the right levels. So we're looking at everything above the Friday PM settlement, which is right here. So you can see these levels have dropped significantly lower. So, for example, yesterday, 13 December, the implied volatility was 62.38% at the end of the day. And that has dropped down now to 46.5%. And also for December 14th, tomorrow, the FOMC day, yesterday at the end of the day, the implied volatility was 53.35%. And now it has dropped down to 39%. Okay, so hopefully that provides a good explanation for the move lower today, the reversal after the news. And how you could have expected that. You know, I've talked about how important this information is, especially tracking gamma notional every day and using that information to set your expectation for what the market might do based on how market makers would need to react to certain moves in the underlying, in the S&P 500. So that was the, I think, the key information today. And the note in the SpotGamma AM Founders note just reinforced that information. Okay, let me check on questions. Okay, I don't see any questions in Discord or YouTube, so I'll go on. And let's take a look now. That's our planning phase. And this move lower was not unexpected based on this information of the low value of gamma notional for SPX and SPI. All right, now let's go look at the live market. And I'm going to take a quick look at SPI and it looks like traders are, have been fading the move here. So they have been buying calls, which is pretty interesting and not doing much with puts. Okay, so that's, you know, that's what's happening in the S&P 500. And now I want to talk about some setups. So this morning I posted my SpotGamma hero watch list. And I ranked the symbols on my watch list by the weakest hero signal to the strongest. And I'm going to pop that up and I still have it ranked in that order. And I don't think things have really changed that much. But here's what I posted this morning. So the ordering is about the same then as it was now. And sorry, I did post that a little bit late. It was a busy morning. But anyway, I want to go through some setups now. And the way I approached this day was, you know, given the, the large pre-market move. And there, there's only so much you can do with pre-market planning. The levels changed so drastically that, you know, what I did was I just waited until the market opened and then saw that the S&P 500, the NASDAQ were both, both dropping right at the open. And I saw all of these weak hero signals more than, you know, more than half of the signals were weaker. And what this means is this is showing the hero signal for today in relation to the hero signal for the last five days. And that's shown by this colored region here as well as the last 30 days. And that is shown by the gray outline. So I see that Tesla is at the top of the list as it has been for quite a while now. And the signal is the weakest that it has been in the last five days and the last 30 days. So that's my starting point. I see the, the broad market indices falling. And so I sorted my list by weakest to strongest. And that's where I started. So let's take a look at, you know, what happened today. So again, you know, this is how I approach the day with such a drastic change pre-market. You know, this was kind of my starting point. And so now I want to, so I see this at the top of the list. And now I want to confirm, you know, just take a quick check in equity hub here. And the first thing that I'm going to do is look at this five day history. And that, what I mainly look at here is these key daily levels, these five key daily levels. And whether they're rising or falling. So I notice that the hedge wall has dropped. Call wall has dropped. And the put wall has dropped. So that's, that's all bearish. That's a bearish signal confirming what I see with the weak hero signal. And we'll, we'll take a look at, at spot gamma hero in just a moment. All right. So the next thing, let's take a look at this composite view chart. So this was the, let's just take a look and see where Tesla is trading now. Sorry for the delay. Tesla's a little bit, book maps a little bit slow today. All right. So Tesla's trading around 161 right now. All right. So let's go back to equity hub. And what we see, this is the, the closing price from yesterday. And what this indicates is first of all, the, this orangish red color indicates that Tesla's put dominated. Throughout the price range shown on the chart. It's not a strong put domination. It's about in the middle of this, this range right here. But this indicates this line steep line right here indicates that the rate of change of gamma increases substantially as price drops just a little bit. And that you can equate that to volatility. So I'm looking at this and looking for a, an increase in volatility as price starts to drop. So remember now prices around 161. So that's, you know, that's what I gather from looking at this chart. Put domination, a substantial increase of volatility as price drops. Next thing, let's take a look at the put and call impact chart. And we can see the put domination, the blue line is below the, the blue put line is below the orange call line call gamma line throughout the price range. And then skew, I talked about this chart yesterday. Let me just go over it again quickly. The way to look at this is this is the delta 50 line right here. This is the at the money options. And above this line, spot gamma is looking at implied volatility for calls. And below this line, spot gamma is looking at implied volatility for puts. And the assumption is that if there's more demand for calls or puts, implied volatility will increase. So what this, what these lines are showing is there is an increased demand for puts because the implied volatility shown on this vertical axis here is, is higher. So again, remember, we're looking on the put side, these lines increase indicating higher implied volatility or higher demand for puts. And if you're bullish, what you want to see is just the opposite. You want to see, you want to see this, the line rising on this side. So, and the, what the lines mean, the dashed lines, I believe this is what, what I understand are the, the next expiration. So for a stock like Tesla, that would be the Friday expiration. And then the, the solid lines are the next expiration around 30 days. And the blue is the previous day and then this, our data from the previous day. And then the green is the day is from yesterday. So this data, this is created once, once daily overnight. So bottom line, high demand for puts, no demand for calls. And then finally, let's take a look at hero. So we've just kind of confirmed what we've, what we've seen here is no demand for calls put dominated and high volatility as price decreases. And as usual with Tesla, there's a very strong correlation with price action and options trades. Market makers are hedging options trades in Tesla almost immediately as they occur. And traders earlier today were buying puts that's shown by the blue line and they were selling calls. All right, now let's take a look at book map. So we built a, a bearish case for, for Tesla here. And here's the Tesla chart. And everything that I see here confirms the, you know, confirms the bearish thesis. Let me just zoom in. So, you know, of course it's obvious as we look at it at, at 2pm. Let's just go back. So first of all, notice that, you know, after the sharp increase after the data this morning, price continues to fall like most everything else. And then let's zoom in on the open up to about noon. So the first reversal point is right here. Note the shift in these volume dots and book map. So these are, these are showing market buys and market sales. So it's, each dot is showing a delta of market buy versus or minus market sell. So green means that aggressive buyers are in charge and pink or purple, whatever this color is, indicates that aggressive sellers are in charge or moving price lower. So here's the first reversal point. Notice the shift from green dots to pink dots. And then there were several pullback entries on the way down to the liquidity at 165. That was the first target or first primary target. And then the second primary target is 160. So that was the first setup, one of the best setups that I saw today. Let's go now and look at some other stocks. And the next is QQQ. Again, sorry, book map is a little bit slow today. So there's the price action in QQQ. One thing that I meant to point out in Tesla, if you'll look at the time that Tesla started to reverse lower, and here's I hover over this, you can see that happened about 950. 950, 951. Let's go take, go back to QQQ now. And notice this reversal happened about five minutes later. So interesting note here that Tesla was leading the market, leading the market lower. So this is QQQ. Let's go take a look at Spot Gamma now. That's QQQ. It's the second one on the list here and zoom in on the morning. And I thought there was a bit of divergence here. I'm going to zoom in just a bit more. And it's a little bit hard to see, but Hero started to move lower really before price moved lower. And that's more of a call divergence. So traders started selling calls shown by the orange line before price moved lower. And let's just go look at Equity Hub. Let's look at QQQ. And again, recall there were shifts lower and higher in QQQ. Let's just take a quick look here. Go to Equity Hub. See that the hedge wall dropped lower. Put wall drop lower. But the key gamma strike increased. So kind of mixed information there. And then I'm also showing this Q curve. And look at the difference in these dash lines between the 1209 line. And that was the day before yesterday. And then the increase in applied volatility on both the put side over here and the call side. Again, we're looking at this Delta 50 as the dividing line. So a huge increase in applied volatility for calls inputs from the day before yesterday to yesterday. Green line being yesterday and blue line being the day before. So just something interesting there. Anyway, the clues were here, weak hero signal, seeing the divergence and the strong confirmation this morning in hero and price action. So another good setup in QQQ there. Let's go take a look at book map. Let's just zoom in. Take a look at this a little bit closer. And reversals there. This purple line is point of control and reversals. This first good reversal happened at the point of control. Again, the shift in from green dots to large pink dots and price starts to move lower. And the next reversal point is at the 295 level. Price targets at 290, 289 below. That's the 290 is the call wall. And that is also the key gamma strike. And then 289 is a combo two level. So that's an important gamma level as well. Let me check for questions. All right, still no questions. Okay. And let's continue down our list. And the next one is Amazon. I'm going to take a look at that quickly. And then we'll go to NVIDIA, which was another good setup. And there's Amazon, the reversal lower at this 9550 liquidity. And the next pullback to 9450. Targeted the 91 hedge wall. Interesting, there's not much liquidity down below. So let's go take a look at Spy Gamma Hero. And again, this is in our list of stocks. This is the next one in the list. And there's a strong divergence in hero and price action, indicating a good bearish setup. So there's the divergence. And the divergence is really apparent with calls and puts. Let's show them by the sharp drop in the orange line there, right at the open. And then the steady drop in the blue line, showing that traders were selling calls and continued to buy puts. And let's just take a look at Amazon and Equity Hub quickly here. And there's the same jump in implied volatility from day before yesterday to yesterday. And that is shown, we'll just show it right on this line here, shown in the move higher from the blue line to the green line. And there's more demand for puts than calls. All right, let's go back to book map now. So another great short setup in Amazon. And now let's take a look at Nvidia. And along with Tesla, I thought this was one of the best setups. And the first thing you can notice is all the pink dots there. A lot of aggressive sellers right from 9.45, 10 o'clock on. And that is shown by the following pink line. That's the cumulative volume delta in the sub chart. All right, let's go take a look at Nvidia. First of all, let's take a look at Spot Gamma Hero. So Nvidia is the fourth stock on our list. This one is the combined SPX and Spy for ES Futures. So that's the fourth stock on our list. So we see that has a weak hero signal as well. And early in the morning, there's really not much confirmation. Just a strong correlation. Actually, there is a divergence here with puts. Yep, that's what I have in my notes. So you see the put divergence. Trader starting to sell calls. And let's go back to Equity Hub now. So I got sidetracked a little bit. So this is how I approached trading again today. First of all, looking at the list, seeing the weak hero signals for all those stocks. So investigating first and seeing at the current price level that volatility would increase up to this as price dropped down from the closing yesterday to 172. And then it would start falling after that. Let's look at the five-day history. And this is bullish for Nvidia. There's the increase in the key gamma strike, increase in the key delta strike, increase in the hedge wall, and increase in the put wall. So all that information is definitely bullish. So far, no information confirming that weak signal. And this shows the slight put dominance below about 186. And again, showing the increase in applied volatility and the high demand for puts. Here's the 50 line. And you can see the sharp increase in applied volatility from 1209 to 1212. And also this skew showing a higher demand for puts and really no demand for calls. So in this case, what I'm relying on is what I see after the market opens. And that is, I see the indices falling, most stocks that I follow falling, the weak hero signal, and then price action, CVD, and spot gamma hero, all confirming the drop lower. So let's go back to book map now. There are a number of great pullback entries down to targets. The primary target was the 180 call wall and the liquidity at that level. And not a lot of liquidity compared to liquidity above, but that was the first primary target at the 180 call wall. Pullback entries down and then Nvidia chopped around the 181 to 183 level. All bearish, all pink dots broke this trend line and then dropped pretty quickly down to 180. All right, I'm checking for questions. All right, let's take a look at a couple of other stocks. The next one on the list, let's go back to the list. Google, strong confirmation and correlation between price action and options trades shown by hero, and somewhat of a put divergence there. So traders really weren't doing much with puts and then they started to buy puts and sell calls and price reverse lower. Let's go take a look at book map now. Let's go to Google and the reversal happened just below the high liquidity at the 100 key gamma strike. All of a sudden these aggressive sellers stepped in as price reached up towards the 100 key gamma strike. And so the aggressive sellers come in after this final buy sweep and start to move price lower. Google is pretty typically a slower mover, but this is pretty good price action in Google for today. And this is the UEM as the upper edge of the expected move at 96 level. And it looks like, at least for now, traders have found fair value for Google at 96. Next one that I want to look at is Apple. So there's Apple. Good movement in Apple today. Reversal just below the 150 key gamma strike. And look at all that liquidity there. Primary target at the 145 hedge wall. And let's go take a look at spot gamma hero. Apple was further down on the list. But I did want to show it. Got a couple of minutes left. Really not much of a correlation between price action and hero. First thing in the morning, but then after about 950, there was a stronger correlation. And what this is showing is a large block trade of calls. So somebody came in with a lot of money and bought a lot of calls in Apple. And then after that, other traders started fading that move, taking negative delta options positions. And there have been several of these large block trades coming in. I think the key was in book map for Apple. The reversal at the 150 key gamma strike. Then I've got a couple of other stocks on my other computer. Give me just a moment to share my screen on the other computer. I don't know why that's not working. So we'll skip that. Let's go back. So anyway, there's snowflake. And before I wrap it up, does anyone have any final questions or stocks that you want me to take a look at? Okay, let's wrap it up here. So I think the main point today was watching gamma notional. And this is why I have emphasized that so much. That's why I look at it every day. And that helped to anticipate the reversal today. Knowing that gamma notional was not nearly as negative as it has been for the, I guess, past CPI report. Powell's speech and that Vana fuel that would drive a rally was just not there today. And again, the note in this spot gamma AM founders note calling for risk or reversal on both sides of the market. And that's what happened today. Now, there very well could be fundamental reasons for that reversal. But this is what I'm looking at the options market. And that's this is my way of explaining what has happened today. So again, I think it's very important to keep track of that of the gamma notional to help you understand how the market might react in certain situations. So watch gamma notional watch implied volatility. And again, that was the key information for today. And then as far as trading, watching the spot gamma hero signal and then just going down that list and finding the best setups. And that's what I did today. So thank you very much for attending. I appreciate you being here. Thanks for your questions and comments. And tomorrow remember the FOMC announcement is 2pm and the press conference starts at 2.30pm and my session starts at 1.30. So it's going to be an interesting day and I will be live during the announcement and wrapping up just as the press conference starts. So again, thank you for attending and I will see you tomorrow. Thanks. Bye.