 Hey everybody, this is Brian, and this video is all about understanding Magic8Ball's predictions. Now Magic8Ball is a stock market prediction engine for options traders. I'm assuming you've already joined, if not, jump out to LaunchPass.com. The link down below. Once you join using whatever email it's going to send you an activation code, you'll have to go to LaunchPass and send it the code and it will grant you access. But I'm assuming you've already done that for this video. And in doubt, if you can't see any of these little things with the locks on them, you're not in yet. So scroll down. Let's go down to predictions. This is what we're talking about in this video. You see, there's a lot of predictions in it, just going to go on and go on and go on. So go down to the very newest one. In case you're wondering why is there so many predictions, these are updated every five minutes. Unfortunately, Discord does not allow real time, so I can't share like some dynamic chart, so I have to update this on a pulled interval. So every five minutes, these will update. I may adjust that time in the future. And future versions, these may be dynamic, meaning it will only update when there's a big market change. But for right now, for version 1.0, this is what we got. The prediction, we'll show you the symbol and the time. That time is in Eastern Standard Time, in case you're wondering. And the prediction is broken into two parts, you have a text wall and a chart. So the text wall is also got little sections in it. Let's just run through those real quick. The first section is all about price action. It is December 5th, 2022 at 3.20 in the afternoon, and SPX is currently at 3.992.17. Let's flip over into our charts, and sure enough, right on the money. This is what SPX has been doing all day. Let's flip over here. So we have a predicted close. This is where Magic8Ball thinks the market is going to close. So the difference between the current price and where we're going to close is $9.23. Now we have two things, which is often the source of confusion, the short term and the long term. What's the difference here? Short term is where we think the price is going to go very, very soon. Meaning we could see this jump up, because it's 3.992, could jump up to 4,002.80. Long term is if there's no market in, the market just runs till midnight, then it's going to settle around 4,000. How are we getting to these numbers? Okay, predicted close, there's a whole crap ton of math that goes into the background here. Predicted short term, this uses a lot of math, and it also uses volume, open interest and a few other little goodies like Delta, Gex, a few other things. Long term, this is purely volume profile analysis, which leads us down to this guy, our nodes. You'll notice node one, 4,000 is the same as long term. Volume profile analysis existed way before the internet. You don't even need really a computer to do this. They used to use this on ticker tapes long time ago. Let's flip over and let's look at an options chain here. Let's scroll all the way to the top. You can go to customize and make sure you have volume in here. You just scroll down, find volume, add it, and then hit okay. You want to make sure that you have volume as one of these columns. At the very top, you'll see it says NA for not applicable, meaning there's no volume. What is volume? Volume is buyers and sellers. This is the market. This is where the action is. Scroll down and you'll start seeing these numbers grow and grow and grow and grow until they hit at the money. You'll see this on both sides, but you notice they're not centered, meaning it's ballooning here and the highest is around 4,000 on the put side and on the call side. Let's just scroll down here. It looks like the highest is right here at 40, 50. You notice these are offset, meaning it's a tug of war happening between calls and puts. That's what drives this price action is. You have people on both sides of this pulling in their direction between calls and puts. In between these two, we have what's called true market center, which just eyeballing it is right around here, 25, 30, 25, 20, 40, 25, 40, 30, somewhere in this area. This is called true market center, which means the price wants to drive up there, but there's a catch. It doesn't have the volume to do it. Let's flip into Magic 8 Ball and no, it does not. Node 1, 4,000, has the most volume. This is the highest price action right here in terms of volume for 62,000, 620,000. That's a huge amount of volume. Then Node 2 is this guy right here. This is really confusing. Think of it in this terms. You have Node 1, Node 2, and true market center. You have a tug of war between these two guys, and there's the center of those two. If you're still not sure, flip into something like TradingView, something that's going to show you volume, and you see how the volume profile spikes out. These are volume nodes. When it goes up, it's a node. If it goes down, it's a well. I didn't invent this. This is volume profile analysis. This has been around since long before the internet even existed. You can see right here, our price action is actually right around this node. If I can just zoom in here, you'll see, yep, here's a node, here's a node. The price is going to keep doing this right around this volume node. This red line is what's called the point of control. You notice how it's brighter here? This is called the value area, meaning this is where most of the volume is. You may look at this and go, oh, well, the point of control is at 4013, but if you've been a long-term investor, you know, the price doesn't always go towards the point of control, which is the highest amount of volume. It usually lands somewhere around it, though. You notice these two nodes are pretty much about the same height, which tells me these are pretty much the same strength. What Magic8Ball is doing is all of that for you under the hood. It's got this beautiful range here. It shows you how big that node is, and then it shows you the highest point in the node, and it's doing that for multiple nodes. You can see, I think, up to five of these with the true market center. When in doubt, the first node is where the price is always going to go to, so this is what you want to watch like a hawk. If you see that suddenly drop to, say, like, you know, 3,000, that means the market's going to plummet. If it shot up to 5,000, the market's going to jump. And to that end, you have Forecasts, which do all of that equation, but multiple days in advance. So you can see this three-day forecast, target 3950, 3950, 4050. This is volume right here. Same thing just a few days out ahead of time. So now I can see the market's going to go down over the next two days, and then probably go up on the eighth. And you've got the relative volume score next to it. Last but not least, in case you're a newbie, we have some recommended trades based off all of this information. Again, if you're kind of deer in headlights and you're like, what do I do? Just tell me what to do. Look at the price. Look at the close. Make sure that difference is good enough for you. And then select a trade. But always kind of keep in mind that volume is a thing and it's in the background. So to use these trades, you can literally just select this, copy it, and go out to thinkorswim. Go to your order entry tools and let's just paste this in. And let's analyze this and see what this looks like. I should note, click this little lock here to unlock it to get the current price. Usually they're pretty close, but the market does move sometimes faster than I do. Let's analyze this and let's get some market real estate here on our screen. And this is what's going to happen. You can see there's our trade. That's right around where we want it to go. I'm not going to go in depth into trades, but I just wanted to highlight that you can copy and paste the trades directly from Magic 8 Balls. So for example, it's almost 3.30. If I wanted to try and pin a butterfly, I would just copy this butterfly. Let's go out here. Order entry, save tools. Let's go ahead and delete this and again, paste that. Here's our butterfly. Get the newest price. Let's analyze this. Ah, where are you? There you are. All right. There we go. I am not a thinkorswim expert. I am a software developer. Bear with me. So here's our glorious butterfly. Try and center this. You can see this is a narrow butterfly. This is great for end of day trades. So I'm going to put that line right there. That's our primary node, 4,000, and you can see our price is actually lower. There's that $9 difference. Now this blue line represents at the end of day in about a half an hour. This pink line represents time decay or in time. This is the profit curve. So as this price moves up towards this node, you're going to start making money. You see the number right there growing, right where the mouse is. That's how much money. So if this shot up to 4,000, you make $133 now or, and I'm watching over here this little box, you can make about $300. It's really that simple. You can just plug this in. And of course, you can adjust the trades however you want. This is just, for someone like me who is a complete options idiot, it makes it that simple where I can copy and paste a trade and then either watch it make money or watch Magic 8 Balls prediction engine to tell me, hey, I need to bail out of the trade. So let's talk about that. Next comes these beautiful charts. And I'm going to go down to the newest prediction. You see it's been updating while we've been talking here. Expand this chart out. This looks busy, but let's talk about it in depth. So you've got these lines here and they're almost snapped on top of each other. You'll see them spread out in other predictions, but you have short term predicted close, long term remember short term is soon predicted close. We're actually almost right on top of that node now of 4,082. And long term, of course, if there was no into the market at 4,000, blue is the prediction history. And you can see right from the beginning of the market, it jumped up. This is usually the first 15 minutes of volume loads up. And then it starts to stabilize. And as it stabilizes throughout the day, you'll see the price kind of go around it. And you can see the price is low. So we're expecting this market to go up. And we can actually double check that with our prediction. Let's get out of here. So current price is 3,988 and we're predicted close at 4,082 price difference of $11. So we're expecting this to go up $11. That is the overly simplified view. Now we have what's called the volume view. Remember, I was talking about volume profile analysis earlier. This is the volume view. So here's volume. This is a visual representation, this blue line of what volume looks like in the market. This is where it gets messy. So you got to kind of look at this legend over here. Black is true market center. Remember I said the tug of war, and then you got node 1, node 2, and I've got the other nodes, but node 1 and node 2 are in red, the rest are in green. So this solid red line is node 1. This dark red line is node 2. And then you got these color boxes. This is that range, how much actual volume you have in here. So like node 1 is a massive node from $39.75 to $40.30. See if I can highlight this, nope, not let me. So $39.75 to $40.30. This whole pink box is that node. And here is the point of control in that node. Node 2 is a much smaller node, but it still has a range. And then there's the point of control in that node with the market center. So you've got node 1, node 2, and then center. And there's this tug of war between them. Now you notice the price is actually lower than node 1 and node 2 combined. So we're expecting this to move up. It makes it pretty simple to understand what's going on once you know what to look for here. We've got these two charts. We've got the price action in the volume view. Price is down. We're expecting it to snap up to the blue line. The magenta line is going to move towards the solid red line. It's going to go up. Makes it dead simple. And let's kind of, now that we understand this, go through some of these others. So let's go to SPY. And it's much simpler because SPY has a smaller amount of volume compared to SPX. Maybe I misspoke. I think SPY has more volume, but SPX has more open interest. Maybe I always get those confused. Again I'm a software guy. So blue line is the prediction history, magenta is the actual price, and we're going to see that snap up. And again here we have this volume area with the volume point of control at 400, and the price is going to jump up. Let me just open the original. So it's easier to see. Apologies. Blue line's prediction, magenta is the price, blue line is volume, red is the end of day node one, and magenta is the price. So this is going to slap up to the 400. So this shows you very simply where the market is and what's going on, meaning it's going to snap up. I showed SPX and SPY because they're pretty much very similar mathematically. I think SPX is actually calculated off ES and SPY. So let's go into another one here. Let's go with QQQ, and you can see it's a little bit more erratic. Each one of these has different behaviors and patterns based off the investors investing, and here you can see the lines are actually spread out. You have the short term, or I'm sorry, the short term down here, the long term and the close. So short term's green, long term's red, close is blue, and you can see that the price action, this magenta line is actually below the short term, and it's going to go to the short term and then eventually up to close. But you notice this blue line is doing this up-down crap. That makes me nervous as an investor, but what I've seen is that it will bounce around, and this is that tug of war going on in the background. That tells me that it's very tight match. It's not nearly as strong as say SPY or SPX where it's just a solid blue line. There's more contention in QQQ. So I would watch this to make sure it stays within this range, and you notice how the lines are on top of each other in SPX and SPY, but in QQQ they're spread out because we have a bigger range for the prediction. Regardless, it's still below the lowest point, so it's going to snap up, and we have this volume profile showing us here's the volume curve, here's the volume point of control, the volume node, and the price is way below that, so it's going to go up for QQQ. Let's go with RUT, scroll down. Same thing. Now, some of these, if volume really isn't that high, it becomes like a modern art masterpiece where you just got these weird lines, but you can trust that here's the prediction, here's the price, it's going to snap up. Same thing, price, point of control, snap up, well below market center. Close some of these out. You can see though the pattern here, it becomes very easy once you understand this to kind of scroll through, but here's a twist. You notice Apple doesn't have a chart because Apple's currently not traded today. Today's Monday, Apple's not trading today, so we get a forecast and this only goes out three days, so the next time Apple's being traded is on 12.9, but it gives us a target of 150 with the relative volume. If we go into Tesla, same thing, it's not traded today, but we get a forecast out to three days, by 12.9, Tesla should be at 185, there's the volume to show how that works. Pretty actually simple once you get into it. I tried to make it what I call idiot proof because I am an idiot when it comes to options and I need to be able to just open this and go, what's the price? Where's it closed? What's the difference? Do I need to grab a trade and I want to visually confirm what I think's happening with the chart? Simple and easy, I hope you enjoyed it. Thank you for watching.