 Hello, everyone. Welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern time. Before I go any further, let me go through the disclosures. General disclosure, 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 involve substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. And as a reminder, my presentation and the Options with Doug channel in Bookmap Discord is very focused 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. Let me just check. Okay, for those watching on YouTube, I apologize. There was a technical issue yesterday and apparently streaming did not work on YouTube, so again I apologize and it looks like it is working okay today. I have a two-step process for trading and the first step is planning and I use positional analysis and what that means is I look at how traders and market makers are positioned in the options market, excuse me, and how those positions shift from day to day to help develop a thesis for expected volatility for the day, expected trading range, as well as a directional bias. And the second step in my process is execution and I look at real-time order flow and Bookmap and market maker hedging flow and Spot Yamahiro to confirm my thesis and to plan and execute trades to find setups. And I think positional analysis just to clarify what that is, I think it's a new way of looking at the market and other traders use technical analysis or fundamental analysis and I find that positional analysis provides me with a significant edge. And on topic questions and comments are very welcome, both in Bookmap Discord as well as YouTube. And I will look at both for your questions and comments and try to answer. So today, first of all, I want to say a special welcome to everyone today, the die-hards here on the day before Christmas weekend. So thank you for watching, thank you for attending, and again thank you in advance for your questions and comments. Alright, so today I'm going to talk about and you're welcome, Moonwalker. And today I'm going to my agenda, I'm going to talk about some news items that came out this week, or today specifically. And the reason that I talk about the news is it has a, you know, especially this year with the Fed in play, it's had a large impact on price action during the day and potentially how traders are positioned in the options market. And then after that I'll go through my position analysis for the day and then we'll talk about some setups. Okay, so first of all, news items for today and there were a couple of news items out at 8.30 a.m. Eastern time. And then and that was the primarily the let me scroll down here just a little bit. First that was primarily the durable goods order orders shown here. And that was worse than expected. So at least yesterday the market was in a good news is bad news scenario and that the strong GDP I think contributed to the drop in the market yesterday of the S&P 500 and most other stocks that I follow. So today maybe bad news is good news, just the opposite of that. And then the second was the was this PCE which came in in line with forecast and that's this top item here. And then the second news item was the consumer sentiment and that came in a little bit better than forecast and then this home sales it looks like it's about the same as what was forecast. So those are the news items and the market has reacted mostly mostly bullish today. So the ESS and P500 and SPX are up marginally about a third of a percent or so. Okay, let's start with the position analysis now and I'm going to go to the S&P 500 and this is the ES futures, S&P 500 futures and what I'm showing I have two columns that I use book map cloud notes to mark notes on my chart and the first is this SG column and that's the spot gamma cloud notes and these levels shown are in terms of SPX converted to an equivalent ES price. So right now spot gamma is adding 25 points to SPX to come up with an equivalent ES level. So that is the spot gamma column and it's marking the key levels and then the second column is this C levels, cloud levels column. This is my notes and I'm showing the supported resistance levels that are noted in the spot gamma AM founders note and also key spy levels converted to an equivalent ES level and then finally the big round numbers in ES. So the key point here is that this put wall, the 3800 SPX put wall held a support today and I think this was the best setup of the day and I'll talk about that a little bit more as we go on and what I'll show is that traders were selling puts as price approached 3800 and that level held and S&P 500 rallied after that. One thing that I want to point out is the levels that I use and this is from yesterday and this shows well the point that I want to make is the levels that I use are based on three things. They're based on the options market round numbers and liquidity that's shown in book map and liquidity is the passive buy and sell orders that are shown in the heat map and what this chart shows is the S&P 500 futures ES reversed right at this LEM that's the lower edge of the expected move and that is the lower edge of the weekly expected move and I mark those on my charts at the beginning of every week and this is based on the options market. It's just a there's a one standard deviation probability that this will stay within that range the lower expected move to the upper expected move and that changes every week and it's based on implied volatility and the price at the time that this level was created so those are, that's one sort of options level that I use. The others are from spot gamma and those are the key levels for SPX and SPY for ES for example and again converted to equivalent ES levels. I also use round number levels and especially on stocks and SPY and QQQ and SPY often responds very well to round number levels and I think it's important to keep track of those levels if you trade ES. So again my levels are based on options and let's, this is SPY the same day and this is showing the lower edge of the expected move for SPY and SPY overshot that a little bit down to this 375 level which actually became the put wall today so this is from yesterday okay so again the important point here is the reversal higher at the put wall, the 3800 put wall and then this reversal lower price overshot this call wall 3835 call wall and the 382 SPY 382 volatility trigger and we'll look at the hero and see what options traders were doing at that time. Okay so again the point being my levels are based on the options market, round numbers and liquidity shown in the heat map and book map. Alright so shifts and levels again remember yesterday was a pretty strong down day with a rebound late afternoon at that lower edge of the expected move and to be expected some, there were some shifts lower in key levels so for SPX and SPY the volatility triggers both both dropped and those new volatility triggers are now shown on this ES chart so ES, SPX is trading slightly above the volatility trigger and slightly below the SPY volatility trigger and those levels are shown shown here and just as a reminder the volatility trigger is spot gammas proprietary gamma flip level and below that the assumption is that traders are long puts, market makers are short puts and they will have to sell futures to hedge their delta exposure and just the opposite above there so it's a negative gamma position for market makers below and positive gamma above and also for SPY both the put wall and call wall or I'm sorry the key gamma strike shifted lower and the call wall actually shifted higher and then for QQQ the put wall and call wall both shifted lower alright let's take a look at the SP500 charts now so I just want to take a quick look at the gamma levels so this is, let's go back to SPX here and 4000 is still the key gamma strike for SPX here it is, 3800 is the put wall and that's the support level that held this morning and note the put gammas shown at the teal lines below the zero level and then the call wall is, here it is at the 3835 level and that is the short call in the JP Morgan collar that expires on December 30th at the end of the quarter and now let's take a look at SPY and SPY, this is the key gamma strike so the key gamma strike for SPY dropped down from 390 yesterday to 380 today and that is the strike with the highest absolute gamma and then the put wall shifted down to the 375 strike and that is this that is the strike with the highest net negative gamma and the call wall is here at 390 and that is the strike with the highest net positive gamma and let me just check for questions no questions so far, looks like YouTube is working okay alright so let's take a look at some of the data in the SPOT gamma AM founders note and one of the main things that I point out every day is gamma notional and this is the market makers position on the gamma curve and given the drop in the markets yesterday gamma notional as expected shifted a little bit lower today so yesterday SPX gamma notional was minus 319 and today it is minus 537 and yesterday SPY gamma notional was minus 1182 and it shifted down to minus 1688 so gamma notional shifted more negative yesterday and as I pointed out before I compare morning to morning so this is the number SPX previous from yesterday afternoon and I look at the I just compare the numbers from the one morning report to the next so that is the gamma notional and other measures of gamma like this SPOT gamma gamma index also shifted more negative so that just means that market makers are positioned lower down on the gamma curve and in that situation that means that traders are long puts market makers are short puts and their delta exposure will increase as price drops and they have to sell futures to hedge their delta exposure so their trading in the direction of price in a gamma negative gamma regime so they that tends to increase volatility and that is illustrated by the advantage art here and this illustrates and shows how market makers delta exposure delta notional will increase as price falls and that is shown by this teal line that shows how market makers delta exposure will change with changes in price and volatility and that is the Vanna effect and then the black line shows how their delta notional changes with changes as time passes and that is the and that is the charm effect and trader HE have a great weekend happy holidays Merry Christmas and take care and we'll see you next week okay so this is for this is for SPX and this just shows how it changes over time so you know again gamma notional became more negative today and that just shows you know pretty shown pretty clearly on this chart and this same for spy okay let's take a look at some set up so that is the preparation positional analysis that I do before the market opens and now one last thing that I do and let's go take a look here this is my watch list little spreadsheet that I keep and I keep track of the current key gamma strike for every stock on my watch list and I compare it with the previous day so this shows the this is from this morning and this shows the key gamma strike for yesterday the previous key gamma strike and then the current key gamma strike shows the key gamma strike from equity hub this morning spy gamma equity hub and I color code these so a red number indicates that the price of the key gamma strike decreased from the previous day and you can see there are a lot of red numbers here so this is just another piece of information another starting point so you know based on this my initial outlook for the day was bearish alright so now let's look at some set ups and we'll see that that really did not that played out very early in the morning but markets rallied it looks like a lot of markets rallied after the at the 10 am data report the consumer sentiment so let's take a look at set ups and I'm just going to go through I'm going to start with the best setup of the day which was the S&P 500 and then I'm just going to go through my watch list and one other thing let's take a look at is the watch list that I posted this morning and as I do every morning in bookmap discord and the options with Doug chatroom and this is my spot gamma hero watch list sorted from the weakest signal to the strongest signal and this is just showing how the current hero signal compares with the last and it's shown a little bit more clear below with Nvidia here showing how it compares with the last 30 days and that's the gray slider sliding scale here and the last five days and that's shown by the colored portion so Moderna this morning at the time that I posted this which was about 9.55 am eastern time shows that the hero signal for Moderna was the weakest that it has been in the last five days and the last 30 days with that let's go through some setup so the first one and I thought the best setup of the day was this S&P 500 here and let's take a look at spot gamma hero let's go back so I've I've got my list sorted just in alphabetical order here and one thing to note this morning the signal for both ES and spy were on the bottom of the list and again I sorted the list from weak to strong so ES and spy had the strongest signal and this is a a classic hero kickoff setup and what I mean by that is notice the divergence here and the hero signal that's the purple line this is the new interface and I hope everybody can see this clearly the purple line starts to make higher highs while the S&P 500 makes is making lower lows here before reversing higher so the way that I handle this once I see this divergence I go to book map and I have two screens open so I'll have this view of hero open on one screen and I'll look at ES in book map on my other screen and see this divergence and I look for a level that could support a reversal look for a support level in this case with price falling and that again was that 3800 level and let's just take a look and see I'm going to break the signal into puts and calls and we can see that traders were taking advantage of the drop in price to sell puts and that's shown by this rising blue line so as price was falling towards 3800 traders were selling puts and price eventually responded and reversed higher at the 3800 level alright let's go take a look at book map again and let me check for questions on YouTube okay no questions on YouTube so I will continue on here and let's just zoom in on this so this shows there were multiple tests of the 3800 level first test, second test third test right before the 10am data and then this final test right here and then aggressive traders step in so this was the entry point so I would typically wait until after the 10am data before taking a trade so this price jumped higher right after the data report, reverse lower at the spy 380 put wall tested the 3800 SPX 3800 level one more time and then this is the test entry here at the break of this trend line and the reverse higher as aggressive traders step in and start to move price higher and there are multiple targets above really centered around this call wall erase that, have the rectangle so another pullback trend break entry up to the volatility trigger and the call wall and then price overshot a bit okay now let's scroll a little bit oops sorry about that so that was the the long setup, the bullish setup this morning clearly shown and actually I meant to show also so the hero kickoff starts with the traders taking positive delta positions and then notice the other traders coming in shown by these rising lines in the sub charts so the blue line is showing that traders were large traders were buying with iceberg orders, there were some by stops triggered and that's shown by the yellow line and then aggressive traders are shown by this pink line here that shifts from pink to dark blue and those are all shown here alright let's go back to spot gamma hero now and notice how the as price hits those levels above those targets the call wall volatility trigger traders take advantage of the high prices and they start selling calls and this is pretty typical behavior in the S&P 500 is that traders will fade highs and lows with options so as price initially they were selling puts and then as price gets to a certain level that activity slows and then they start most likely buying back their puts and start selling calls and this is again very typical behavior in the S&P 500 and the great thing about it is it can provide a great leading indicator for price action in the S&P 500 alright let's take a look now at spy ES and the reason for that is that options trades in spy are a key driver of price action in ES traders take options positions in spy and market makers hedge those with ES with futures so very similar setup here let's zoom in again pretty much the same thing that was shown in ES options trading leading price this morning and that doesn't happen every day with the S&P 500 but when it does it provides great signals alright let's just go take a look at spy in book map so here's the here's the reversal higher this morning right here just after the 10 AM data so above this 378 C1 level that's a combo level and C1 indicates that is the most significant of the combo levels they're ranked from 1 to 4 so a C1 would be the most significant combo level and that is combining spy and SPX absolute gamma levels as usual the spy round number levels are in play often very significant levels for price to react so as I pointed out before with S&P 500 there are a number of ways to trade that you can trade futures spy shares spy options SPX options your choice okay the next setup was Apple let me just check for questions on YouTube again okay no questions on YouTube okay so the next setup was Apple and notice the levels the gamma levels as well as liquidity and book map were in play but primarily at the time it was just the spot gamma levels and that is the 130 put wall which as we've seen with the ES SPX that level typically acts as support and it did in Apple as well today that's the 130 level and then the other level in play was this 132 hedge wall so let's go take a look now at spot game of hero actually I'm going to zoom in on this a bit and you can see the shift in order flow here notice all the green dots coming in before price increases and those are buy minus sell market orders and green indicates that buy orders are greater than sell orders alright so let's go take a look now at spot game of hero for Apple and I thought this was a nice divergent setup this morning zoom in a bit so notice this vertical purple line that's the total line and that is showing a big block order and we can separate outputs and calls and see that there was a large block order for calls so some large institution bought a number of calls that's shown here whoops and then traders continue to buy calls and price reverses after the 10am data and makes a final test of the put wall level before rising higher up to the 132 hedge wall level so again the way I would treat this I see this large block order for calls look at book map and see the 130 put wall level and expect that to support and just wait for order flow and book map to confirm the long entry and that is a typical or classic divergent setup using hero and the next setup was google and I saw what looked like another divergent setup here with this block order coming in there's the block order hero makes a higher high and then price reverses higher after the 10am data let's go take a look at book map google and there were no gamma levels in play on this reversal higher but there was a tiny key gamma strike as a target was in play I'm just going to I just want to see if this kind of highlight this purple line that's the lower edge of the expected move and it's kind of obscured it's right there at 88 and price reverses at right above this level right after the 10am data as there was traders were taking positive delta options positions and a natural price target at the 90 key gamma strike and which is also a level of high liquidity so this is an instance where all the levels that I look at line up in one key level so it's a big ground number 90 liquidity shown by the heat map in book map shows the resting cell orders and those orders attract price and then finally that is also the key gamma strike for google the level with the highest absolute gamma let's go back to spot gaming hero now well we've seen enough of that let's go to the next one and that's Moderna and if you recall that was at the that was at the top of the list of the hero signal list that I pointed this morning ranked from weakest to strongest so it was Moderna, NVIDIA and Tesla and that let's zoom in on this early morning section and this was definitely bearish showing the drop you know just look at all the pink dots there so a lot of aggressive sellers these and there were liquidity targets primarily primary target at the 200 key delta strike and then the next liquidity target down at 197 and let's go take a look at that I keep forgetting to turn that off let's go take a look at hero now and notice the hero signal is still weak you know that's shown price or hero is just not not rising and the signal is still weak which is the pretty much the opposite that it has been in the last few days Moderna has been in the news and again here's the the weak signal for Moderna let's zoom in and this will show that calls were driving price action and traders were selling calls and most likely this is the calls that they have been buying during the week so this morning calls definitely driving price action traders are selling calls market makers buying calls and they have to sell stock to hedge their delta exposure so if you were fast you could have caught a pretty nice drop here in Moderna and let's go to the next stock on the list now again I'm not going in the order of the list that I posted I'm going in an alphabetical order picking out what I thought were the best setups of the morning break this out into puts and calls and I thought there was a bullish put divergence this morning look at traders selling puts and you could have interpreted this either way with traders selling calls but it looked like to me this put signal was stronger so let's go take a look at order fluent book map now and pretty choppy action in Netflix today anyway there's the bullish setup in Netflix and the next setup Nvidia and that was the next stock on the list this morning ranked from weakest to strongest and that really did not unless you were very fast did not necessarily play out quick drop at this trend line and then aggressive sellers come in and drop it right down to the 149 liquidity level pause it looks like they pause briefly at the 150 put wall and that high liquidity there and let's go take a look at hero now Nvidia so there's strong correlation this morning or yeah especially in the morning up until about 11 o'clock or so strong correlation between options trades and price action and a little bit of divergence here so that's Nvidia and again ES was the best setup of the day QQQ let me just check for questions on YouTube and David asks are you able to get spy levels in cloud notes and the answer is no not at this time that is on my spot gamma I'm a wish list for next year and I will send that email to spy gamma shortly so I hope they do that that would save me a ton of time having to enter all those levels in my spreadsheet every day for all the stocks that I have in book map and David asks why did the puts not follow when selling calls and vice versa is happening there I guess two separate instruments and you know the different traders may prefer to sell calls or buy calls and or buy put sell calls and vice versa so there in some stocks not necessarily so QQQ and I thought let's zoom in on that so I thought there was a call divergence this morning and that's shown right here and again price checks whatever support level three or four times and reverses higher shortly after the 10 a.m. data as traders were buying calls all that time and let's go take a look at book map now go to QQQ and anybody else who you know who's interested send that request to spot gamma as well I would love to see cloud notes for stocks and I'm going to suggest this as a starting point the third ninety hero stocks and I as a minimum yeah QQQ and spy definitely I would love to see spot gamma cloud notes for those you know it takes me a fair amount of time to mark those levels in my spreadsheet and get them up on this on these cloud notes every day and here is the reversal higher QQQ and in this case it is at a C1 level a combo level in this case of QQQ and NDEX so it's going to be primarily QQQ at the 264 level and that is a C1 level and that's shown here and there's the final test the reversal higher a few minutes after the 10 a.m. data and the move higher to eventually to 268 and let's just go take a look at hero again I'm going to break this up into puts and calls again so it looks like what happens at that 268 level is traders stop buying calls and they start buying puts so this activity levels off and they start buying puts and then they're selling their calls and finally let's take a look at Tesla and as usual there's a very strong correlation between price action and options trades as traders trade options in Tesla market makers typically hedge those trades immediately and what I'm looking at here there's a very strong correlation between between puts traders buying and selling puts and price action but you could interpret this as somewhat of a leading indicator with the calls traders are buying calls and here they're buying calls and selling puts and Tesla reverses and let's take a look at book map look at the order of flow in book map look at Tesla so there's the setup in Tesla and it looks like it takes Tesla a little bit longer to get going it makes a series of slightly higher lows and then finally reverses higher about 10-15 about 15 minutes after the consumer sentiment report and then blast higher as aggressive traders come in and start to move price higher and it looks like there are no spot gamma levels that were in play today but options trades were definitely driving price action and let's just go take a look at hero one more time go back to the total signal and again as usual with Tesla there's a very strong correlation between options trades and price action and let me check let's see in book map discord there's a question do I get the hero watch list weakest to strongest data pre-market and no so hero is based on options trades and equity options don't start trading until 9.30 a.m. so that's why I wait until typically somewhere between 9.45 and 10 a.m. to post it and so you've got to I wait a few minutes after the open when traders start trading options before posting the watch list let me check YouTube for questions and no more questions there okay at this point I'm going to wrap it up so again the best setup today by far the easiest to interpret the best leading indicator the leading signal was in the S&P 500 and primarily looking at the ES chart that 3,800 level that was expected to act as support and has acted as support earlier in the week acted as support today and traders were taking bullish options trades as price moved down to that level and that was just a very clear setup and that was the best setup of the day so with that I'm going to wrap it up I want to thank everyone all you die hearts here on Friday afternoon before Christmas weekend for watching for your questions and comments everybody have a great holiday Merry Christmas and I will be here next week starting on Tuesday so thanks again for attending and watching and thanks for your questions and comments and I will see you next week thanks again bye