 Hey, everyone How's it going out there? Hope everyone's having a good start to their trading week and what a week it is Let me go ahead and just make a quick adjustment here so we should be in pretty good shape here to Get this whole thing started. We're gonna talk about a lot of different stuff today. There's a lot to cover So first if you're on the YouTube or if you're on the book map discord You can see my screen if you're just on spaces and you want the video Feel free to check out the link to the video there so that you can watch alongside So first we're just gonna do a little bit of introduction I'm Marketson mayhem. You probably know me if you don't I've been trading since 2005 I've navigated through the great financial crisis and COVID crash I trade a lot of different asset classes not just stocks, but futures bonds currencies commodities I really like to look for where the trend is. I'm more of a swing trader than a day trader But we're gonna talk about both timeframes today and get a little bit more into it If you're interested in my work, you can check out traderade.com for the shorter timeframe trade ideas and education and macro visor for the longer time frame trades as well as investment ideas and education now in terms of Where you can find me on YouTube if you don't already follow me on YouTube You just go to youtube.com slash mayhem for markets That's mayhem number for markets and if you're interested in book map They did help to sponsor this stream today. You can get 30% off by visiting traderade.com Slash book map. I'm sorry up to 40% off just scroll down to the specials All right, so let's get into everyone's favorite part of my presentation And that's where I quickly read through the disclosure all book map limited materials information and presentations are for educational purposes Only and should not be considered specific investment advice nor recommendations Trading futures equities and digital currencies involve substantial risk of loss and is not suitable for all investors past performance is not necessarily indicative of future results So what does that tell us it tells us? Please be careful out there because you know lot can happen in the market very quickly and Especially in the environment we're in right now. So we'll talk a little bit more about that First of all, we've had the great reset in Sentiment so we have gone from Kind of bearish retail sentiment closer to neutral But there's a lot of people that have just kind of clocked out for now You can see it on screen if you're looking at the YouTube or discord here that this has come down from a level It was over 2.4 to now under one just under one So that's been a pretty big reset from very high levels of bullishness the highest we had seen since late 2021 to the present Where obviously things have well the market hasn't been too kind to people really since August And so we're seeing that in these measures now for AII for those that don't know this is just measuring retail sentiment It's a survey driven. There's a lot of noise in the data I look at this sentiment survey much more for the extremes on the bullish side than the bearish side Because most folks are long only and so when they're super duper bold up that typically ends up being a place where it's a good area Maybe you risk off a little bit be a little more careful with what you're seeing in the markets At least that's what I like to look at it as especially when we see some degree of coalescence Across other measures. So we went from that euphoria now We're more neutral which gives bulls the chance to kind of bid things up from here And that would be what I'd be looking at with some qualifiers and we'll get into more of that but first let's look at managed money right these are supposed to be the smarter folks in the room and They are getting bold up again. They did reset Their positioning recently, but they have gotten back long and I think it's something to be just a little bit mindful of what's happening here with Managed money. They were kind of buying the dip, which is the first time we've seen them do that They usually are buyers of rips and sellers of dips getting caught on the wrong side of the market really for the last Almost two years now They're going back into buying the dip again here increasing that net positioning It's something to keep an eye on we did get the reset though. So overall, you know, this is something again to keep an eye on When we look at the CBO we put call, you know what I'm looking at some slides here that might be just a little dated Give me one second. I'm gonna make sure that I get us what we need on this. So bear with me Yeah, that was definitely not what I wanted to show you all So let me go ahead and just sort of go back into presentation mode here And we'll start this not quite from the top, but a little further in So I know everyone is thinking about the Bank of Japan We're gonna actually talk a little bit about that today Because I think that's a pretty important area that Is changing a little bit of what we might expect, right? So the Japanese yen going into today is down quite a bit. Last I checked it was down about 1.29% this chart says 1.18% so the downside is actually accelerating a bit in the end Which is not a great sign particularly when you see the Bank of Japan coming out and saying hey guys You know, we're actually gonna remove any solid yield cap at 1% and We're going to look at letting that rise a little bit more naturally perhaps gradually the language was very accommodative But it was still a major change in policy and yet in that major change of policy The yen is falling the Nikkei's bid We did see a boost in the Japanese 10-year yield that might put a little pressure on our own Yields and the yields on the long end across the world But on the other side of it, you've got the yen getting sold down which makes it a bit of Attract I mean it's a bit attractive for that carry trade, right? At the same time though We are getting down to levels that we saw intervention if we look down here We can see that the last time there was an intervention in the yen Was that late October early November and that did mark a beginning of a new sort of I would say countertrend pop because the trend in the path of least resistance in the yen as we can see has been Just lower highs and lower lows all the way down But we're getting down to this level that could be pretty important just below 150 to the USD And I think that's something where we may see ministry of finance or other Japanese government intervention in the yen So I wouldn't get super bearish of the yen here But I would be watching for a confirmation if we do break below last year's lows I think that'll set us up for more continuation for now caution is warranted. There's a lot of moving parts here So I'm looking at this and saying this is an interesting reaction to what ostensibly is a pretty Significant departure of prior policy with the Japanese central bank So at the very least it's something that's caught my attention because of the implication short term that this could add to some Of these carry trades with the yen weakening, but also watching that maybe downside will be a little bit capped here Next up we have the Nikkei 225 and you can kind of see something interesting that's going on with this one I'm watching this because we see that it basically retested its recent lows It's now getting a bit of a rally from those lows That's interesting to me because the Nikkei and the Nasdaq have traveled almost the same path for quite some time So to see the Nikkei retest those early October lows and then get a boost from there is very interesting to me I think it does suggest that we have some room for US stocks and particularly some of these texts to start moving again to the Upside obviously Tim Apple is reporting earnings on Thursday So all bets are off if the market doesn't like that But here's the Nasdaq in red and the Nikkei in black and you could see they're almost the same thing now I'm not using EWJ because EWJ is not hedging yen exposure So it looks a lot different, but if we actually just use the Japanese index or if you used HEWJ, which is the hedged Japanese Nikkei ETF you would see a similar pattern here So a bit in the Nikkei and that easing in the yen kind of suggests we could get a little bit of Appetite in the Nasdaq. So just something to keep in the back of your head these Intermarket dynamics and correlations are always interesting to watch Now next we have the new highs versus new lows in the Nasdaq And this is what we're seeing underneath the surface right on the top level Things don't look so bad But when you look inside these the delta between new highs and new lows There's not a lot to get too excited about here This so-called bull market in 2023 hasn't really registered a lot of new highs Underneath the surface of the Nasdaq there's a bit of a rot And that's to say it's really the largest companies that are outperforming or performing at all And these smaller companies are having a bit of a struggle here A lot of them even the mid cap and some of the large cap have not been able to register new highs this year And now they're starting to roll over last week brought the most new highs versus new lows Since september of last year So it's again something to keep in the back of our minds This has been a very concentrated rally It's been very much in mega caps and then there's obviously certain other sectors that have done well like energy But this is not what you want to see if you're feeling like this is the start of a new bull market and we'll get into why But first let's look at this This is the 10 year yield it went from 0.5 percent almost 5 percent So you would expect a lot of these long duration assets where they've seen The cost of capital at 10 years for us sovereign Go up about 10 fold that they should see some pressure here right and we are seeing a little bit of that It's egg you could say it's it's starting a little bit in the nasdaq It's starting, you know in the small caps that have rolled over to new lows There is this greater sensitivity to rising rates I'm not sure if that's fully worked its way through risk assets on screen We have the move index versus the vix the move is in blue the vix is in black This time around rising vol in the rates market is actually dragging equity vol Pretty well higher in almost a one to one correlation The last time this happened in march equity vol didn't really catch higher the way that maybe Um, it could have or should have but this time it's different This time vol is kind of harmonized across a lot of different markets So when you look at equity vol bond vol currency vol oil vol, they're all surging oil vol is really Really surged it's tripled since its lows in september Now here's a chart of the nasdaq in red versus the tenure note in black The correlation broke down earlier this year after the bank term funding program and sort of the fed coming in and smoothing out Some of the problems that were in the financial system with the assistance of treasury and fdic But we're starting to see the nasdaq look heavy again that gravity could be in part because rates are rising and on screen If you look at the price of the tenure note falling, it's sort of like the inverse of rates They they move in opposite of each other. So if you're not familiar when bill note or bond yields rise The price falls and the longer duration that asset is the more price will fall. It's more sensitive It's higher beta. So this does suggest that there is some vulnerability In fact, if you look at the nasdaq equal weight, these charts are a lot more correlated So it's really these very very large mega cap tech stocks Seven of them which make up over 40 of the nasdaq holding this thing up at least so far The world's fate rests in tim apples potentially capable hands, but again, we'll see on thursday Now underneath the surface, we're to redo the sentiment part because we have the most recent data and this is AA versus AA Bulls versus bears. It's Pretty well neutral like I was saying before so not a lot of color to add here But what I did want to update is the commentary on NAIM because indeed there was a washout And this is the lowest level of long allocation that managed money on this survey has had all year long So they bought the last dip. They had their faces ripped off to the downside and they capitulated kind of moved to the sidelines What does this tell us that flush out means there's some room to the upside when these guys start to get long again I think that was a little bit of what we saw yesterday. There could be some room for continuation here We'll go into the technicals and talk a little more about why but I think this would be a short term pop if we get one And this is a chart of low volatility versus high beta Why is this important? Because this is telling you there's a rotation happening underneath the surface and underneath the surface there's Managed money are basically long only a lot of it not all but a lot of managed money or long only If your mandate is to have 90% of your cash deployed into equities then When you're going into an environment that's much much more risk off. You can't just go all cash You can't just buy bills. You have to keep participating in the market And if you're going to have your skin in the game, you're probably going to rotate to somewhere that's lower beta and presumably safer So what we're seeing in this is a rotation from these high beta stocks, which would be represented by sphb The large cap high beta etf and if there's an index for this as well And then on the other side of the trade the splv the large cap low volatility Etf and there's also a respective index for that if you're looking at the chart on screen You can see that we were in the greed zone earlier this year And this is just an approximation in terms of qualifying, you know, what these levels are It's based off the trend we've seen over the last several years Being in that greed zone just tells me that there's lopsided allocation into high beta And a bit of under allocation in this low vol more defensive space Now what's interesting about this is this is just a ratio chart. You can do it on stock charts yourself You can put an splv colon sphb. You could build your own chart You can track this but you see it in flows and positioning as well So when you look at the prime desk data from goldman and jp morgan and morgan stanley You can see in the flows there is a under allocation To these safer more defensive stocks and they're still lopsided long concentration in higher beta Now that's something that I think we should be mindful of because it often it often can present an opportunity So I think that there's still room here for these Low volatility stocks to continue. This is what I call relative strength driven trade We're taking these two factors. We're comparing them against each other on a ratio chart and on that same ratio chart. We're seeing a series of higher highs and higher lows And that really started from september on so that's a compelling reason to look at this trade now Would I get long here? No, I wouldn't get long right here and now I identified this trade on the trader a discord on october 4th and said it's a good time to look at it again And I think that if it consolidates and we get another one of those higher lows It may indeed be a time to add to it or enter it and we can see that when you have these de-risking events This trade works out quite well. What's interesting is if you plot this chart Against volatility against high yield spreads against other signs of stress in the market There's a pretty decent correlation. That is to say this Rotational trade tends to take off when the market's under pressure for the reasons we talked about managed money Rotating from high beta into low vol so the setup of being short high beta and long low vol in equal size Kind of puts you in the middle of that rotation to benefit from both sides of it should it play out Of course as I have as you all are watching here If you have any questions drop them in the youtube chat or in the comments in the spaces or on the bookmap discord I'm broadcasting to three different places simultaneously here, but I'll do my best to keep up with everything This is a really interesting chart. It got a little bit clipped But basically it says returns the s and p 500 equal weight in small caps one year after the bear market low Here we are after the bear market low in 2022. So this isn't the data from 2022 This is the data from the october low in 2022 to last week It's from edward jones. They have some pretty cool charts that they put out every week And this chart is telling us something pretty weird every other bull market from the bear lows from 1982 Over the last really 28 years has always had leadership from equal weight and small caps We do not have that this time. This has been very narrow leadership Just from these mega cap stocks and so that's why you see the s and p in the naztac Which are market cap weighted rallying But interestingly enough small caps are making new lows over the last several weeks for the year And equal weight is basically flat to down So this is not really what you want to see in this type of an environment if you're saying, hey, it's a new bull market I'm going to invest. I'm really bullish You really want to see a greater risk appetite We don't see that greater risk appetite and that concerns me because You know, this doesn't look like anything we've seen before and we're starting to see some signs at higher rates are becoming A bit of a drag on risk appetites here So I would be paying attention to this if we do want to see this somehow manifest into a bull market We need to see risk appetites increase And that would mean equal weight and small caps need to outperform markedly from here versus the broader index And so not saying this is what's going to happen. Okay. This is just an example This is taking us back to the the dot-com bust And there were many many prognostications of the new bull market and the s and p it was actually more tame if you go back to Um, the nasdaq there were about five or six rallies that you could have qualified as a new bull market before the market ultimately hit its low And started to stabilize and move back higher again So getting too excited about what this may or may not be, you know, we do want to look at some of these historical periods It's not to say this is what's going to happen But all this excitement right now is something that maybe is best guarded for the time being because in the here and now We just don't see a lot of signs that indicate that this is a healthy bull market We haven't seen a true trough in earnings. We may not have seen a trough in the economy There are some signs that higher rates are going to have Maybe a bit of a diminishing impact on risk appetites, particularly with these longer duration risk assets And so let's talk about some relative strength that's going on underneath the surface of this market because when I'm trading I like to look at momentum for my swing trades. That really is the basis in which I qualify swing trades I might have a thesis But if I can't qualify that thesis by actually having A chart that shows me the same then I'm not going to get into the trade So I can have a lot of fancy thoughts about what the market may or may not do But if I don't see something that tells me that I'm right then I'm not going to touch the trade I'm just going to keep those notes on the side and wait for something to set up This is a chart of commodities versus yes and p500 And you can see that's a pretty impressive amount of relative strength that we're seeing in things Versus equities and that really started over the summer and that was around the same time that what else happened Rates started to rise and equities started to destabilize It's probably not a coincidence that you're seeing commodities run And everything else get just a little bit more concerned So this is something to keep an eye on because not only is it a pressure point for the broader market to see the potential for inflation Re-accelerating, but it's also something that tells us there's trade opportunities underneath the surface One of them has been dba and at macro visor. We've talked about agriculture being an opportunity for some time And I see my partner Isha is on the spaces. Hey Isha, how's it going? And we've got this trade setup in Agriculture that's been really running quite well over this year Right, especially within the last several months and that sets up opportunities and some of the companies that participate in this space as well And we've been talking about those but just dba as an etf just as an aside is very different than the agricultural index So if you're looking at the ag index and like why don't I see this in the ag index? It's because the weightings are different dba Is weighted much higher in a cocoa sugar Live cattle things that have really been running this year. So it's really benefited from that run as well So it's actually been a great place to go now what I get long dba right here right now I don't think I would I think I'd wait for it to consolidate a little more But as you can see on the chart, it's very clear relative strength breakout higher highs higher lows This is exactly what you want to see if you want to get bullish of this space The next one we have is xop versus spy This is a trade that we talked about on macro visor over the weekend and you can see again Higher highs higher lows energy outperforming the broader s and p500 And we think this is a trade setup for some time to come This is one of the things that we do is we look at a big picture We get some ideas from that and then we drill into some of these relative strength areas and try to identify Actionable trades based on the price action that comports with the broader picture Because you can use macro to get a sense of what's going on And then you can use the price action to qualify and find some of these trade setups Another interesting area utilities are starting to show Some relative strength versus the s and p now We're not at a point yet where I'd say it's time to get long Utilities for anything more than an end of cycle trade I wouldn't say it's time to get long for an investment here But I would be looking at this very closely to see if we see that continuation If we can see those new highs take us above the levels we've seen in september And really qualify that there's a longer term opportunity in this Similarly in staples, we're actually starting to break out We're making highs that are higher than what we saw in september So I'd actually be more interested in xlp and potentially taking a swing long Based on this relative strength breakout that's happening in a defensive space And again why defensives because everyone hates them right now They're under allocated There's a lot of short interest in these companies And they are a safer place to go at the end of the cycle and I do believe that's where we are And we're seeing relative strength start to qualify for You know that trade setup as well So let's talk a little bit about what's going on in the options market. There's a large put wall at spx 4100 That's the level where maybe we start to see a decent amount of a bid based on options positioning Gamma flips positive at 4303 So there's a little ways above if we get to that positive gamma territory It tends to imply that dealers change their hedging It's a bit of a stabilizing force to see them go From where they are in negative gamma where they're more likely to sell dips and buy rips To where we may go in positive gamma where they're more likely to sell rips and buy dips Which you can imagine sort of compresses that range in price that we may see So these are some of the levels to watch these are Levels that we generate automatically based on the algorithm. I wrote for trader aid You can find them on the website as well as our discord We even have a little bot that can spit out these levels So you don't even have to look at the charts all text-based pretty cool stuff And here we have on screen a chart of our favorite trading instrument the s and p 500 These the e-mini futures and we can see we're sort of bumping up Against this downtrend line right and pre-market before I really got started here We got the employment cost index data. It was a little spicy It came in at 1.1 percent. That's 10 bits higher in expectations of 100 bits And that's telling us that an annualized rate of employment cost is increasing at 4.4 percent Which is higher than what the Fed would want to see So as that data came out market became a little more risk off which made sense And I think that that's something to keep an eye on but we've got a lot of data coming out today So we'll have a slide of that in just a little bit But for now my pivot to get bullish on the s and p intraday would be pushing above 4208 Building some volume to show acceptance and I'd be looking at that say five six points above So let's say we can get to you know 42 13 42 15, you know after we've built some volume. We're showing that acceptance. We're pushing higher I'd be looking at intraday longs on that basis because then we're breaking above this descending trend line Getting back into the channel And it's likely we'll push up to that low volume area around 42 40 if we're able to make that break So it set us up for maybe 25 handles of upside That's how I'd manage the upside trade today If we're not able to get that and we reject here Then it's likely what we could see us kind of come back to that point of control Which is now around 41 37 So we've got a two-sided trade dynamic today. We did get a little washed out last week We could see relative strength dip below 30. So we were Oversold we did hit that point of control. We got a pretty decent bid after we had that look below So that's overall constructive on the short term But now the buyers really need to prove themselves and they need to push above this descending trend line Which would show me just from a technical and sort of Geometric price action basis that maybe we have some room to the upside again Be looking for acceptance above 42 13 to 42 15 and then potentially upside up to 42 40 Otherwise if we get rejected here looking at potentially getting back to that point of control Which could be you know, we'll probably see some support around 41 50 But could get down to around 41 37 once you get into an area where there's a lot of auction activity Over the last year in the volume profile price can get a little sticky down there It can kind of be like it gets stuck in some tar and kind of chops around in a range for a bit So we'll have to pay close attention here But from a longer term basis sellers are very clearly in control You can see from july To the present it's been a series of lower highs and lower lows And a lot of this buying has been a seller rip opportunity And I still think we're in that regime. It doesn't mean intraday sell every rip It means on a longer term swing trading basis There may be more opportunities to raise cash hedge or take directional short bets against the market But in the here and now we need to give it a little room to breathe after that sentiment reset that we've seen And things getting a little exhausted to the downside Let's look at the nasdaq now And it's a very similar looking chart, wouldn't you know it? It's same kind of idea that we're pushing against this descending trend line on screen And I would be looking at 14 308 as a very key level to defend I think if we can't defend that level This thing is likely headed towards new lows on the other side if we're able to break above that descending trend line Which is going to be about 14 431 and these are all futures levels We're not talking about cash index we're talking about futures just to be clear But if we're able to push above there I think that's where buyers are likely to take control and push this this thing up probably about 250 points or so Probably back testing that 20 day moving average and that may end up being another selling opportunity But for now we have to respect that the market is digesting these recent this recent selling pressure It's gotten a little ahead of itself in the short term And that may give us some room to breathe on an intraday basis and potentially catch some pops to trade and potentially even fade Let's also take a look at the tenure note because everyone's talking about bonds. I think all of fin twits become bond experts over the last year and Sorry about that someone on the discord needs to mute their mic here All right, all good. And so we've had that back test of this key level It's right around where we're trading around 106 18 We did get exhausted to the downside. You could see rsi just clipped 30 now We're moving off of that I don't think though that after this reset the move up in long yields is over Because there's a lot more supply that's coming due The treasury's going to issue about 1.5 close to 1.6 trillion of debt over the next two quarters But we also know every time they do these announcements they come back and revise them higher So it's quite likely that you know, they say 750 For q1 of their fiscal year, which is by the way what just started their fiscal year is kind of weird But it basically starts on october 1st And we don't yet have a budget from the house They at least I haven't seen them pass a budget for this year And so we don't necessarily know what the actual borrowing is going to be But what we do know is over the last two years or so they've continually pushed up The amount of borrowing during the quarter up sizing it sometimes by as much as 50 percent So when they say 1.5 trillion, I'm going to lean towards probably closer to 2 trillion They'll probably be more issuance on longer tenors, you know fives tens 20s and 30s And I think that does continue this environment of a bear steepener And I know the market opens coming soon So I'm going to try to get through the rest of these real quick here got crude oil It's below its up trend line here. It's testing a major area of support It bounced there and now it's sort of bumping its head up against this rising trend line But once again another theme of a market bumping its head against the trend line that it cut below Right, it's interesting to see this on so many different charts at the same time You could say we're at a pretty key area of decision crude I'm sorry looking at gold here Kind of an interesting story of a pop that got exhaustive, right? We had relative strength get well over 70 here We got to this key area of resistance around 2020 20 interesting and then we got reflected lower Now we're at a point where you know, really this market needs to consolidate to be healthy When gold rips parabolically it actually concerns me quite a bit. I don't like seeing that I've been trading gold since about 2006 and every time it has a really big fear driven parabolic move It needs to have something big catalyzed that for continuation Otherwise it tends to retrace a lot of it so it doesn't mean I want to fade gold here But I would if this move is to continue like to see it consolidate these gains for a bit Before making its next push higher if it makes a push higher from here and there's not especially a really Large catalyst to warrant that push I'd be a little concerned particularly when you look at some of these Intermarket relationship charts these correlation charts gold tends to track the tenure note in price And yet, you know, we can see very clearly that is not the case here And finally we have the dollar index which is consolidating. I wouldn't say it's topped It's a little early. I know some folks are kind of saying that but You know, it is cutting below the 20 RSI is trending lower towards neutrality But we're still in this range and as long as we're in this range. I look at the dollar as consolidating So that's all the slides I have now We're going to get into book map and just take a look at what's going on post market open here The s&p 500 is dropping a bit We do have a rather large resting bid here just about 40 181 let's zoom out a little more we can take a look at what's going on On screen if you're watching the stream, you can see that we have some of these key options levels in the s&p Automatically mapped into book map. This is driven by that algorithm that I wrote I just take the data I feed into book map and it shows it on screen so we can see that coalescence between Where there might be key areas of resting liquidity volume profile interactivity On the session and where there are options That are already on the books or are coming on the books as these Most active puts and calls show the hot call being the most active call The hot put being the most active put once we have that data for today and after about 15 20 minutes They'll start registering those levels on here as well But it is interesting to see just how much resting liquidity is below us You know that can sometimes act as a bit of a magnet But if we get to it and kind of reverse quickly then that can be the opposite that you get this sign The market doesn't actually want to get to that price and it can start to move higher So watching these resting liquidity levels is pretty helpful That's one of the reasons I do like using book map for my trading both on a day trading basis and on a swing trading basis This can be actionable data Let's look at the nasdaq here. Wow. Look at that beta this thing. I like to call the beta beast It is cutting to new Lows after the open here So, you know, if you're looking at this thing on a very short term opening range, you'd say gee, that doesn't look so hot It certainly doesn't And if there's continuation here then sellers are certainly going to take control price action intraday I like to look for the 15 20 minute opening range personally to get a better idea because The opening like really the first five 10 minutes of the market can be so volatile So and you can see it right now. We're now cutting back into kind of where we were pre-market So let's see how this goes and evolves. I'm not going to take a trade right off the open on this Here is the 10-year note futures on screen the zn contract And you know rates are moving a little higher. You do see this big iceberg up here 2000 lots sold That's just a sign that institutions are continuing to dump duration And I think that's a theme that we'll probably have to get used to for some time to come as the yield curve is flat Now but is likely to steepen and I think where are we at? pre-market here on or out post open here on the tens and twos we're at 20 bits inversion It's not much. We're at about 120 over the summer So we are steepening here out of negativity and potentially into neutrality and positivity And we have gold on screen Gold is holding steady here a little bit of pressure after the open But overall pretty steady and here's crude trading down to 82 50 I like to watch crude pretty closely these days It does seem to be one of the areas where rates are keying off of Seeing how oil trade sets a bit of a sentiment in in rates And there's a big relationship big positive correlation between the 10-year note rate And the price of crude they tend to move together So if crude moves higher long end tends to push up and that's one of the reasons we want to watch oil Both intraday and over the longer term So let's head back into the s&p. We can continue to monitor this open. It is looking heavy Maybe we actually see this resting bid get taken out by these sellers Remember, we talked about that being a bit a bit of a potential magnet here. Perhaps it does act as such I'm going to take a break to see if anyone has any questions anywhere If you're on the book map discord feel free to tag me in so I make sure to see your question I'll get that notification if you're on twitter spaces. Just leave a comment in the spaces and if you're on youtube Just pop that in the chat All right, I don't see any questions yet. So we'll continue moving forward here I'm going to look at some of the options activity that we're seeing as well So give me a sec to pull that scanner up on screen Yeah, look at that though on the s&p here. We just cut through that resting bid And we are seeing selling pressure increasing This is not an encouraging open so far if you're feeling like we're going to get this sort of countertrend pop Sellers are definitely taking this thing quite a bit lower after that initial pop, right? We're already over 10 handles down from there We did see some smaller traders. Some shorts get stopped out. That was 262 contracts Stopped out to the upside before we made this move lower So I'm sure a lot of them are looking at the screen and ringing their hands like gosh if I just have my stop a little higher But this is one of the reasons that I'm not a huge fan of just trading the open blindly because you can get smacked around like this And we just got some news over the wire about five minutes before open that the us shot down two drones outside of a military base in iraq So that probably added a little bit to the concern here. Let's see what gold our favorite measure of fear is saying That's getting a little bit of a bid. What about oil? Not so much there. So this doesn't seem to be the real driver of what's happening in the market Rates also Relatively flat on that the nasdaq yikes. That looks quite bad here So overall, you know, if you're if you're trading the five minute opening range, you've got a decisive breakdown Into a potential negative trend day Similarly on the s&p where we've taken out those large resting bids that were below us See a little bit of institutional iceberging here 171 lots bought, but that's not enough to catch my attention quite yet Joel martin on the youtube asks Thanks for the analysis. I agree with the overall bear position if wrong though, what's a realistic top bull case Rather the worst case scenario for someone being cautious I think, you know, it depends on time frames If we're talking about an intraday timeframe, then we could get back to You know that sort of low volume node around 41 40 That would probably be your level of unless there's a really powerful catalyst to push it higher That's probably the max wrong intraday when you talk about Over let's call it the rest of this quarter I think it it really depends a lot on a number of different factors one of which is do rates stop rising If rates stop rising and we start to see some stabilization And the dollar kind of peaks out and we see that consolidation Give way to downside and commodities stop their incredible run Then I think that could give equities some room to breathe and that could be the bull case Is that it's just not Continuing that sort of crushing weight of rising prices and rising rates isn't continuing to exert downward force on the equity market There's obviously some talk that the fed might not hike in december It's pretty much off the table for this week, but if they don't hike in december that could also Give the market a bit of a boost as well Let's take a look at the nasdaq here. It's it's definitely not having a good day weaker than the s&p Nasdaq index cash is down 0.55 percent s&p 500 is down 0.16 So definitely seeing some more weakness in those tech stocks Rates just getting a small bid here off the lows on the tenure futures Gold's pretty stable here again the the drone thing in iraq doesn't seem to really be the driver oil is Kind of testing its lows again here and this is below that trend line. So this continuation is bearish Could catch some of these buyers off sides Positioning isn't super stretched in oil But it's long enough that you could get some selling pressure if there is that decisive change in momentum I would say that if you cut below 82, you're likely to see some more sellers start to really come in We do get some inventory data tomorrow as well, which could be interesting for the oil market So back to the s&p on screen Just seems like it's trying to kind of stabilize around 41 80 here We do have a number of different moving parts by the way with today's Calendar i'm just going to pull that up on screen the economic calendar So we've got chicago pmi coming in in five minutes I don't think that's going to be a huge market mover, but it's certainly one to keep an eye on the consensus for this reading Is 45 previous reading was 44.1 and then at 10 a.m We get conference board consumer confidence that one may be a bigger market mover Particularly if it comes in Better than expected or worse than expected measurably so then you may get this sort of you know The opposite of what you might expect like if consumer confidence comes in much better than expected Rates might push higher and equities might move lower because it's the sign that the consumer is going to keep buying They're going to keep pushing the economy inflation the fight is not over And so therefore that idea of a fed pivot is getting pushed further off On their side if consumer confidence came in way lower than expected Then I think you'd get rates falling and equities could get a bit on the opposite idea that maybe the feds Going to come in a little earlier than people are expecting or maybe at least within those expectations So we'll be watching that data as it comes through We also have dallas fed services index coming in at 10 30 We've got a one year bill auction at 11 30 So just several different moving parts today, but you know obviously yesterday and You know yesterday was a pretty interesting day for the macro picture, but it gets much much more interesting On wednesday when we get ism pm i jolt's job openings and the fed all in one day It's a lot of moving parts to keep an eye on And then of course on thursday apple earnings and so if there was any reason not to get super duper Long or short just not to get too biased. It's all the moving parts this week everything can change Everything can change which is you know if you're day trading on daylight today It's especially important to consider just flattening out your entire book Into the close because a lot can change on fed day. You also could get some last minute hedging flow into the fed Let's just take a quick look at skew and see where that is right now Uh, it's not terribly it's not a terribly poorly hedge market going into the fed But I wouldn't be surprised to see some hedging particularly for tomorrow and thursday's s and p options expiration In the final hour of today. So that could put a little pressure. We'll see It's going to take a look around see if there's any questions that folks have asked Remember i'm streaming this to three different places. So give me just a moment And if you do have any questions and you're listening on the spaces Just feel free to click that little speech bubble area and you can leave a comment and I'll try to get back to you That's on like the lower right hand side If you're on youtube you can pop it in the chat and if you're on the book map discord just tag me in And that way I'll make sure to get the notification Markets seem to be stabilizing a little bit here after that initial sell down Rates pretty stable Gold's getting a little bit of a bit off its lows And crude continues to fall here making a series of lower highs and lower lows in today Now I think if crude gets enough of a price reset It's probably going to start to look a bit attractive here, but not seeing that in the immediate term I want to see it stabilize and reverse a little bit before I want to get along the commodity itself Breaking below that trend line It's not the best look And the options market we have a really big put trade that just came through xli. That's the industrial etf looks like someone bought 96 strike for the expiration of november 17th And there was about 700 000 premium in that trade. So that's that stands out to me a little bit That's a pretty big hedge hedge in the industrials about two weeks ahead Some other option flows coming through but none of them are of anywhere close to that magnitude that i'm watching Let's zoom out a little bit here on the s and p Just to look at some of these areas of resting liquidity. We can see resting liquidity above us kind of faded away a little bit Even this offer up here has gone down by over 100 contracts And below you did see that resting Liquidity increase a bit. So we'll keep an eye on that It's not an exact science But sometimes that can just give us a little bit of a sense that the path release resistance may be lower Based on how these market maker positions are coming in on the books Where they want to execute NASDAQ similar look to the s and p it's now We've seen sellers pull that point of control quite a bit lower So that's a bit bearish, but they are starting to push price above that point of control So something to watch view app is quite a ways above here Just below 14400 on the front month futures contract Would like to see it push above view app to really get a sense that buyers are wrestling back control on the tech laden index Rates. Wow. Look at that. There's a decent bid coming into the tenure here. That's a good sign for the NASDAQ Gold's coming off its highs, but it continues to make this push here We'll be wanting to watch that yellow metal with rates coming down And geopolitical stress remaining elevated gold could continue to get a bid into this, but it's not exactly a healthy move And crude continues to move lower Which is probably one of the reasons we're getting some of that relief in rates and a bit more of a bid in stocks All these intermarket dynamics, they do matter quite a big deal. They they're they're quite important And just sort of chopping along here. Remember, we get some more data coming out pretty soon. We just got A data drop however that was Chicago PMI it came in at 44 versus consensus of 45 So that is contraction anything below 50 is contraction But it wasn't that much of a deviation and it's quite frankly not a very widely watched data release I think there's going to be much more attention paid to consumer confidence, which will be coming out at the top of the hour Hope everyone out there is having a good trading week so far I know it's been a very choppy market. You know, there's nothing wrong with sitting on your hands If you don't feel you have an edge, it's the best thing to do So if you're not confident about direction, if you don't have a setup that gives you better, you know, reward than risk Sit back and watch the show, especially over this week where you have the fed and apple earnings Things could get pretty Volatile in either direction Caution can pay dividends of capital appreciation, right? I still have a pretty decent size allocation into t-bills because it's been a great place to hide with rates around 5.5 Not quite ready to go higher up on the duration curve there But once I feel the fed really is done hiking twos will start to become much more attractive to me I still think they could have one to two left Of course, we'll see what they say on wednesday Starting to see the s&p get a little heavy again here. We'll see if it takes out the Post open lows. Let's take a look at our friend the nasdaq. It's actually moving the opposite way We are chopping above this point of control here really keeping a close eye on that Right still chopping along but again when this price chart is moving up It means the 10 year rate is moving down. That's generally good for stocks and particularly the nasdaq Gold continuing to have this bid just settling back down to this point of control and view app They're coalescing and then seems like buyers are coming back in And crude. Wow. Look at that now down to just 10 cents above 82 9 cents above 82 8 cents above 82 Remember 82 is a pretty important level. You can see that resting bid there to 104 contracts on cl Is nothing to scoff at that's actually sizable So that could act like a bit of a magnet pull price down into it And you do see resting liquidity building in crude below We can see some above but you can see more and more coming in now below That's pretty bearish for the black energy source All right, let's watch the spools here below this point of control taking a little bit Of time to try to challenge it. We did see sellers pull that point of control down That is a bit of a bearish look particularly now that price is moving below it We do see some sizable flows Someone got in at the 345s on qqq with puts and They put in 225 thousand in that so it's a pretty big hedge It's sort of the hedging flows you might see ahead of the Fed and apple in some of these options Remember xli was much bigger though particularly given that it's a significantly smaller Sector etf that was almost 700,000 put in at the 96 strike for the 17th of november similarly qqqs were for the 17th of november there was another trade in the cues for that Same strike And they put in another 100,000 so in total that's about 340,000 of hedging flows in qqq this morning so far It's reasonable size And then we just saw one print for spy at 131,000 for the 410 strike on november 10th And so, you know, you can kind of look at these premium flows And you can look at the individual stuff that stands out and that's all well and good But the other part that's helpful to look at is the disparity between total premium paid and the amount of volume Today puts are very much in favor. There's a lot more unusually large flows on the put side than the call side So that's another kind of sentiment indicator underneath the surface And you can see this large resting bid growing here at 4170 acting again like a magnet We've been talking about this so this is looking pretty bearish. It looks to me like The sellers have control. We've now made a 20 minute and 15 minute opening range break to the downside So looking like we probably have a downtrend day in this market if we're following opening range to qualify that And certainly seeing that resting bid Increase both at 4170 and now down below here at 4165 gives us a little more confidence about that We can also see this key gamma level just below the current resting bid that coalescence is it makes It makes us look at that level with just a little bit more scrutiny that it's important If we don't get a bounce there, there's likely more room for continuation Let's take a look at our friend the nasdaq chopping below the point of control You're seeing some of these small traders get stopped out. That's 193 contracts there And that is also a opening range break to the downside the 15 and 20 telling us that sellers likely have control of momentum in today Rates are stable Gold is pushing higher to 2010 now new high post open and crude is trying to stabilize above 82 Just barely now six cents above four cents above And i'll be wrapping this up here in about six minutes here. So I hope everyone has enjoyed this I am here every Tuesday On the book map stream. I'll be doing this with spaces. Maybe I'll add video to the twitter side next And then i'm also on the book map discord. So it's like a three-way simulcast Pretty fun But that means if I didn't get to your question, it's not because I'm ignoring you It's because I've got a lot of different things moving on screen at the same time But yeah, I think the the diagnosis here, you know, obviously anything can happen with consumer sentiment So for me, I'm not going to put on a big trade ahead of that number Because anything can happen with a data release like that if there's a big variation between what the expectation is and what the data is But my inclination unless there's a materially worse than expected consumer confidence number Is to fade strength today. It does look like we have a downtrend I'll be qualifying that by watching the point of control and view app as well You know looking for price below that to tell me i'm on the right side of that trade Let's go over to the nasdaq again And you can see that resistance right here at the point of control bounce and rejected Really a lot of interest at that level as well So we'll be watching that As as we get up to these, you know data releases that are closely watched you typically see liquidity thin out a bit And then once you get that data release usually within 30 seconds to a minute it it really You know comes back in full full book depth comes back into what it was before and so trading during that event You know, you're going to see wider potential ranges of price discovery and book depth book depth in the s and p500 is very low right now It's much much less liquid Than what you might have expected To see this time of year typically seasonality portends to higher levels of liquidity in the spools But rising rates tightening central bank policy and skittishness in the market Has led us to a rather illiquid trading environment and you can see it with the way price discovery has been lately as well Been quite choppy So for me that means smaller position sizes slightly wider stops and much more care in executing trades setting them up For good risk to reward, which means i'm less likely to take trades and if i am taking trades I'm being pretty careful about my approach Because in this environment the way that this market can move if you're not careful You can find yourself repeatedly taking losses and with trading on any time frame. The key is capital preservation I know we all want to make money, but it's really important to keep what we have as well Going back to the s and p500 here We can see that the resting bids below us are growing a bit more We've got just about three minutes left if anyone has any questions for me Feel free to pop them in the spaces comments the youtube chat or on the book map discord and tag me in Seeing s and p move back up here to the point of control once again We'll pay close attention to what price does there But we're three minutes away from this data release also three minutes away from me ending the stream It's only an hour once a week on tuesday, but watch that data release closely and watch how price reacts I like to look at the tenure and the s and p most closely after a release like this for a clue about momentum And if you want to continue watching the book map stream you can on my youtube It's live 23 hours a day five days a week if you want the options coloring the Tool that I built for trader aid we have that exclusively on our discord And if you're interested in getting 40 off of book map you can do so by visiting trader aid dot com slash book map and scroll down to the specials And finally if you want to get 30 off your first month of trader aid plus We have an opportunity. It's a flash sale trade or treat use that coupon code at checkout get 30 off your first month So I hope everyone's had a good time listening in maybe you've learned something Maybe you have some new things that you're thinking about based on all this but overall I hope it was informative and helpful and I hope to see you all next week I'll be back tuesday at 9am on spaces YouTube and on the book map discord to talk about what's going on with the big picture and then zooming into the micro details Of these intraday futures markets looking for these trade setups across the way So I really appreciate everyone tuning in remember once again cb consumer confidence coming in At 10am previous reading was 100 consensus. I'm sorry previous reading was 103 consensus is 100 So a meaningful departure either way could push prices around that could be a good area to start looking at trade setups If you're so inclined to want to trade this thing intraday, but be careful It is a much less liquid more volatile market. So having too much size or too much conviction in anything Can lead to some problems So once again, thank you everyone for tuning in appreciate it spaces in the youtube will be recorded if you missed it And you wanted to catch the presentation in the beginning. It's all there for you And I will look forward to catching you all next week. Good luck out there