 Hey everyone, hope everyone's having a good day. Happy Taco Tuesday if you are so inclined to celebrate We're gonna be talking about the market as we often do a Tuesdays at 9 a.m I have a lot of fun with you all when we do these so looking forward to today And we're gonna dive into a bunch of different details But I just want to give folks a moment to arrive. I've just put out an announcement about this on social I'm gonna post this on a couple of other places. So I just want to get some folks in here. So Let's talk a little bit about me first I'm Marketson mayhem. I'm gonna be your host today on this book map stream talking about trading futures primarily and I'm from trader aid as well as macro visor So these are two companies that I founded a really sort of a self-starter I taught myself everything I know about finance. I do have industry experience, but that came after I taught myself So, you know, I started trading back in 2005 with my own money, but I did my first trade back in the late 1990s Borrowing some funds for my dad to buy some Amazon and Sibyahu. They basically both doubled the next day I said pull my money out I don't understand why that would happen and that means that I'm not comfortable with it because if the market just doubles You know one day to the next no one would need to work a job So I just even though I was younger. I felt like something was off and I decided it was time to pull out Learn more and come back later with my own funds. And so I did 2005 I started trading mostly stocks and then in 2006 futures, of course I navigated through the great financial crisis that followed in some day I will tell you all the story if you haven't already heard my interviews about it But that was a fairly interesting time as well Nevertheless, I'm here to talk more share my experience and give you a presentation about what I'm looking at as We start today if you're interested in my work, of course, you can follow me on Twitter mayhem for markets You can check out trader a comm and macro visor comm as well And if you're so inclined you can also sign up for trader a with 30% discount using the code bookmap 30 at checkout for any of our Plans and here's where you can find me trader a comm macro visor comm my YouTube YouTube comm slash at mayhem for markets where I just started posting a new series of videos about from abundance to scarcity and the Opportunities that that will set up for investing over the longer term And of course, we also have a up to 40% discount on book map So if you're so inclined go to trader a comm slash book map That's trader a comm slash book map scroll down to the bottom under special offers and you can see those plans Now I've got to read you this general disclosure Considered a disclaimer 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 it's not suitable for all investors Past performance is not necessarily indicative of future results. Thank you all are with me. It's pretty standard stuff So first let's look at the net and gross gamma exposure of the S&P 500 index This is the most traded options complex on earth Just so you all know because I know a lot of folks look at spy I know that that that folks focus more on that that's fine But you've got to understand this is the center of it all spy is More of just sort of like a tail and this is the dog so to speak right So when you're looking at SPX you're talking about an options complex It trades about 1.2 trillion dollars of notional every single trading day and about half of that About six hundred billion or so is going into options that are expiring in six and a half hours or less Those are those zero DTE's that we keep hearing so much about Some say they don't move the market others who watch this more closely including myself contend that in fact they do Nevertheless the whole chain exposure is also quite important. These really large levels of gamma tend to be areas that the market finds and interacts with and We need to be aware of that whether we're a high-frequency trader or a longer term trader These are key levels for us to kind of keep on our radar and yes admittedly the game has changed It didn't used to be this way It didn't used to really be that options were the tail that wag the dog, but over the last several years They've become so important that ignoring them puts us at a trading disadvantage Particularly when it comes to the S&P 500 So these levels I've mapped out in a nice little easy list if you want to screen capture this be my guest These are the key SPX levels to watch. This is based on an algorithm that I wrote That analyzes over 212,000 data points or about 10,000 options on the S&P chain And it breaks that data down every 20 minutes or so and update It's automatically on the trader aid website and this is something that I found to be quite valuable because these levels are levels that are often interacted with and We can see that the put wall and vault trigger at 4,300 boy That is going to be an important level particularly with the way pre-market looks Okay, I think that's the level that we should be watching the most closely today Because if we can't defend that level today like we did yesterday things could get ugly That's a huge level of exposure by the way. Let's just go back to the last slide. Look at that net exposure at 4,300 largest on the entire chart That's important. That means if that level fails we get a decent amount of potential to go down Probably another 25 or 50 points Okay, and if that level is defended Then it's more likely that we actually see a reasonable bounce sort of like we saw yesterday So again, these are the levels that I think are worth watching They are calculated by an algorithm that I created to scrape the CBOE data and put it into a human readable form That maps out all these key levels And this is something that a bot that I created for discord also is able to spit out on command on the trader aid discord So that's kind of cool. We're also deeply in negative gamma territory. What does that mean? Some of you probably already know but for everyone who doesn't I want to break it down Negative gamma territory means that the market is in a position where there's so much short gamma That dealers are in a chase dynamic that encourages them To essentially chase whatever price is doing. So if we have an upswing They're chasing price higher if we have a downward Move in the market. They're chasing price lower and we're deep deep deep in that negative gamma territory You can see that on the chart the gamma flip level calculated by this naive model It assumes all options on the CBO chain are bought to open as looking at us about 130 points deep in that negative gamma territory So that means that in order to get back into positive gamma lower volatility regime The market really needs to push higher at least options positioning needs to change meaningfully So going into today since neither of those things seem to be on the table right now We need to be cognizant that though. We're looking at about 50-60 billion dollars of position changes for every 1% move 1% higher follows with a lot of buying 1% Lower follows with a lot of selling so that can add in to the Volatility feedback loop and it's something that we should consider because again This gets to the idea that options have such a large and important influence on the overall market Next up hedging demand has not risen much This is S&P 500 skew if you're not familiar with what that is It is the difference between the premium paid for puts and calls on index options And it's always gonna have a volatility smirk basically since 1987 that nasty crash We had compelled a lot of changes in how hedging takes place long story short You're always gonna have folks that are using the S&P 500 index to hedge more Than you're seeing people that are buying upside exposure in calls. That's that skew the larger the skew is the more well-hedged the market and Obviously, there's other hedging mechanisms such as shorting futures stocks ETFs and otherwise, but this is a pretty good proxy It's well used and this is not a particularly well hedged market a lot of folks have still Let's say remain somewhat complacent even though we've seen a reasonably large drawdown We're also not quite oversold yet According to the New York Stock Exchange McClellan oscillator. I look at it being more oversold if we're actually dipping below 70 I think that's about the line that I draw. We're nowhere near that at this point And that's telling me that you know, basically, we're not in the neutral zone We have seen selling that selling has been enough to really draw the market down a bit But we are certainly not in a place where we can say that there's been seller exhaustion either So that's where we are. That's why I call it the neutral zone. You can see it in sentiment This is retail bulls versus bears the ratio is basically reset to neither being in any sort of favorable position here It's also replicated by professional money managers the NAI M survey showing similar that they've reduced positioning significantly from when they were employing long leverage and Now they're just kind of Well Neutral they've increased their hedges, but not a lot and they've reduced their longs and Low volatility defensive factors are in favor in this environment. What does that mean? Several things it means large influential market participants are rotating their long-only exposure because remember most managers are long only They can't just pull everything out put it in cash and hide under the mattress They have a mandate to be deployed which means they're going to go to the safer parts of the market when it gets scary out there And they're doing exactly that We're out of the greed zone. We're kind of in. Yep You guessed it the neutral zone just barely poking our head in but what is this set up for and maybe there's a decent long short opportunity long SPLV short SPHB if we do see that end cycle rotation That could set up to be a pretty decent trade here But it also gives us a sense of sentiment that we're out of the regime of infinite exuberance and Perhaps we're seeing a little bit of a moderation there So let's look at some charts the first one we have here is the SNP 500 You can see that we're just trying to hold this area that we're at right now I think if we break much lower basically if we get below that SPX 4300 which on ES I think there's a delta of about 41 points right now if we break below there and and you know We're probably going to go retest that trend line. That's a trend line We'll look out on the NASDAQ in the next slide But that would put us in a pretty precarious position we can see our si is not yet oversold But it is looking Somewhat exhausted. It's a little bit of a different look than what we see in the McClellan oscillator We are above the point of control on this chart, which is you know quite a bit below us here You can see that at about 41 50 or so But I still am concerned about the way this chart looks we're below the 20 below the cloud We've been rolling over and if we can't hold 4300. I think we could see a meaningful leg lower from there the NASDAQ actually looks a bit worse than the SNP and This is concerning to me because the NASDAQ has been the leader. It has been what has led this rally So not having its support here is kind of concerning You can see this trend line that's just recently been established and I know it's a little bit iffy But this is probably what the market's looking at here They were below the point of control below the 20 day below the cloud I'm not particularly happy with this chart this chart actually screams if we break lower We've got this huge area of low volume where it could get quite volatile in the market We'll have to make as my partner likes to say a decision horse calls that the decision zone those areas of low volume And he's absolutely right because these are places where the market doesn't want to interact where it hasn't liked to auction You can see the last time we were there the NAS that kind of blasted higher Well that volatility can very much go the other way So it's going to be interesting to see if we do break this trend line and get into the low volume node How price interacts? That's going to be very important that may decide Where we go in the intermediate term with this rally that was built more on multiple expansion than actual growth And then we've got the tenure now rates continue to rise But rate-sensitive stocks have been relatively resilient until recently We're starting to see the impact of rising rates really start to have an impact on price discovery in these markets and seeing the tenure break down as it has We're seeing that elsewhere too. We're seeing that in the 30 in the fives. We're seeing Major major price bottoms be broken out. In fact the other day the 30 year touch levels it hadn't seen in price since 2010 Two year as touch levels in yield hasn't seen since 2006 and the five and ten since 2007 What is that telling us the idea that rates rising that higher for longer? It may be with us a while longer than the market thought There's some reevaluation happening and that's why the long end of the yield curve is being pushed up The other thing is do you really want to lend to the government for 10 20 or 30 years at a lower rate? Then you could lend to them for a month So that premium doesn't necessarily make sense particularly when we're on the precipice of a shutdown credit downgrades and more kerfuffles in the Legislature being able to reconcile anything, you know vaguely resembling a balanced budget just seems impossible and so you can imagine that 10 20 30 years from now The dollars that you bought that bond with could be worth a lot less So when you get your coupon back the rate of you were paid may not be enough to make up for that inflation So you know lending the government so much at the longer end doesn't make sense I would like to see yields much higher and so I think that that's something the bond market sees I know there's been a lot of charts out there about how short everyone is of the bond market that basis trade has hedge funds Net long fixed income that is not a large short trade waiting to blow up and shoot bond prices higher we need to not take One single data point and contextualize it as if it is the entire market it is not the bond market is net long There's lots of inflows, but supply is overwhelming demand and that's one reason that rates are pushing higher We also have some key auctions by the way today We have a two-year auction tomorrow a five-year and on Thursday a seven-year That's right in the belly of the beast in terms of the yield curve The very important to see how the market prices these auctions It'll give us a sense as to what its thoughts are on the two-year in particular about Fed policy moving forward Finally, we have a chart of crude and would you look at that? It's starting to stumble a little bit which might be good news in the short term this rally that we've had in crude since early July has been extraordinary and It has helped to reinvigorate some of the inflationary pressures that have probably helped to scare rates a bit higher So with crude starting to look like it's Consolidating maybe rolling over a little bit. You can see that with the relative strength after it became exhaustively overbought Maybe we get some consolidation here. We re-explored a pretty key let price level from late last year We got pushed below that That's the area also above where there's not a lot of volume So it hasn't been a lot of transacting in that area for about a year So it'll be very interesting to see what happens with oil whether we're just consolidating or whether we start rolling over I can say however that within the energy industry if oil rolls over there are some stocks I'll be interested in picking up because I don't think oil rolling over will be a long-term Situation unless the economy really really weakens and we'll get a little more about that with final GDP that comes in on Thursday So let's dive in we're going to look at some real-time examples Including my dynamic SPX options system that I created that is visualized in book map. That's that same algorithm I was talking about earlier I'll discuss how I use book map as a part of my day trading and swing trading strategies for ES and other futures And I welcome your questions if you have any questions Don't be a stranger post them YouTube chat or on the book map discord and just tag me in so I know that you're asking me a question and I'm just going to quickly switch screens here. So bear with me a moment All right, there we go And I'm just going to add these indicators in here for folks on YouTube so that you can see the market pulse indicators from book map Just on the top of drag those in They're pretty neat They give us a little bit of a better sense as to volume pressure Those are my favorite Indicators and I have that for the NASDAQ and the S&P on screen and you'll notice I've got a fair amount of different instruments. I've got the S&P futures the E-mini right going into today Got a decent amount of liquidity above us in excess of about 2.3 thousand contracts more above than below You can see that with this mapping tool from book map that checks out the resting liquidity levels And you can also see that if we zoom in a bit We do have a fair amount of pretty important options levels here that we may explore as we move throughout the day We're about 10 points above 4300 SPX if we're just looking at spot pre-open here. We're about 11 minutes outside of the open itself So I think it's gonna be a pretty interesting day for us. I think that this could be pretty choppy and my Kind of pivot on today as you may have guessed is gonna be that 4,300 level. I Think it's destiny that we probably touch it The question is can we defend it and if we do are we able to push higher? If we cannot defend it and we push lower I think it opens up a decent short opportunity if we can defend it and we can push higher I think that opens up a decent long and what I'm looking at to qualify that is about five six points off the level in either direction With volume building to show acceptance to indicate that we have a potential trend trade set up We'll also be watching that opening range particularly for the first 15-20 minutes to see what it tells us about the potential for a trend day Not every day is gonna be a trend day though So if the opening range doesn't give us the feedback we want and if we have just straight up chop And we're not able to get much action on the pivot it may be a no trade day And you know what there's no shame in not trading if risk and reward are not in your favor So I do try to be pretty disciplined about that there are days that I simply don't trade if I don't see a good setup But I always try to look and see what may be out there and what might be interesting So we'll certainly be doing that as we go throughout the open Now let's take a little look at the calendar here So got consumer confidence at 10 a.m. We just had s and p home price index Home prices rose more than expected month over month. I don't think that's going to be and year over year I don't think that's going to be a big market moving event But it is interesting in the sense that yet another indicator that this Re-acceleration of inflation theme may not be behind us that owner's equivalent rent, which is about a third of CPI Could continue to rise and I know some folks have been content to just discount everything that's rising and say hey see look there's no inflation anymore But when you do factor in things like housing food energy Transportation, you know all the things we need to survive Inflation is still a bit problematic So consumer confidence from the consumer conference board. I think that will actually be Interesting new home sales could also be interesting Richmond manufacturing is less consequential and then of course we have a Fed speaker at 130. In fact, we've had on dock it six Fed speakers For this week Yesterday we had Neil Kashkari I was waiting for him to tell us a little bit more about his lasagna indicator for measuring inflation saying that half tongue Tongue in cheeky the man really did talk about a lasagna indicator for inflation, which was kind of funny kind of smart But yeah, anyway, we are in an environment where the markets reevaluating what the Determination of this Fed may be And I think that's the most important part to contextualize if you're longer term If you're not just trading day-to-day, you know closing out your entire positions at the end of the day Understanding that this Fed is serious and the markets likely to take them more seriously because some of these inflationary pressures are Re-accelerating that's going to change some of the price discovery dynamics in my opinion, and I think that's what we're seeing to some extent So we will be watching rates and oil pretty closely today because I think both have been pretty important for the markets also Important to look at rates and oil as being bound together the 10-year note The rate on it tends to trade with a reasonably strong positive correlation with the price of oil So oil goes up rates get dragged higher and that likely has to do with more angst about the potential for forward inflation Which also PPI has about a point seven five positive correlation with oil So, you know, you look at these different measures you can see there's direct pass or effects last month diesel prices were up 41% diesel touches every part of our lives rails trucks agriculture shipping and so when you see diesel moving like that particularly as we get a you know into closer to heating season that's a problem because it comes from the same distillate and We have two refineries in the east coast that are set up to idle soon We've got another one in Texas that I believe has gone offline Russia just recently said they'll start exporting lower quality diesel again But that's not going to be enough to make up for the difference So we could see some more pressure in New York Harbor diesel and that could put some more inflationary pressure elsewhere boosting rates and potentially putting more pressure on stocks as we navigate this year So it's going to be important to see how that goes but also might set up opportunities to get long some of these Refiners that are still operating Valero is on my radar among others So just things to consider if you're looking at this from a swing trading or investing perspective Scarcity can bring about opportunity fact it often does So let's look at how we're set up as we're just about Little over five minutes from the start of the trading day first pre-market's been kind of Well, not very exciting. We've got a kind of zoom in to see any real price action here so Not a lot to go off of other than I think we're just about eight points above that key level of 4300 I think into the open we're gonna have some choppy volatility because yesterday They'll probably it was a lot of buying into the clothes will probably be some Continuation of that order flow in the first 10 or 15 minutes But from there, it'll be very interesting to see kind of how things settle That's why I like looking at that opening range after that 15 or 20 minute mark Because you get a lot of that order flow out of the way and then maybe you get to see what the larger players are continuing to do Let's look at the Nasdaq here. Of course, it is going to be choppier I'm gonna just clean up one element of this chart There we go And yeah, I like to call this my little high beta machine Because it really is Nasdaq's chopping along just around its point of control here and and It has been weakening it has been In my opinion telling us, you know, maybe some of these longer duration stocks that led the rally are starting to see a little bit of Vulnerability here as rates rise remember stocks are the longest duration instruments really and so when rates rise especially when the equity risk premium is So low and then in some cases and you're comparing it with Bills is actually inverted that does prompt some concerns about valuations Crude is bid here as we're getting closer to the open But it is down pre-market by 0.23 percent. So bid off its lows You've got some liquidity above us perhaps we'll get pulled into that and then we have the 10 year Which is just sort of flat here It has had a pretty rough several weeks So it wouldn't be too surprising for it to kind of take a breather and maybe not Fall out of bed for a day. You did see a decent amount of iceberg buying of that tenure You had a thousand contracts bought here. You could see that accumulation has been steady pre-market That's what that sub chart indicator means That's good if you're looking for the tenure to be stable if we see that continued pattern of accumulation And this is a very liquid contract. You can see it with the amount of resting liquidity all over this order book That's three hundred fourteen thousand Contracts it's a stark contrast to what you see in the S&P, which is the most liquid equity index and it's trading at about you know maybe 45,000 contracts on the book So folks have any questions as we prepare for market open here I'd be happy to take them You can post them in the YouTube channel or the discord just tag me in I'm just gonna take a quick sip of my beverage here So coming into today just looking at the commodity complex pretty soft overall There's a tepid bid and soy and wheat rest of the agricultural complexes Pretty flat to lower oats has a decent bid lumber has a decent bid gold is getting sold down it's finally starting to succumb to some of the pressure of rising rates and Platinum is having a pretty terrible day as is palladium both of them down over 1% OJ continues its run, although not in a Ford Bronco. It is nearing all-time highs and Coco has fallen, but it looks like it's consolidating here It may actually be an interesting opportunity to continue following that trend Val has a decent bid coming into today the front month VIX contract at 1785 up over 2% and Energy outside of crude oil not doing so well gasoline heating oil and natural gas all selling down a bit Let's take a little look at the news not a lot of terribly important Developments in the last half hour. Let's go back a little farther. My partner. I sure writes a Article called breakfast bites every morning. That's pretty darn handy to get a jumpstart on your day If you don't check it if you're not aware of it check it out It's free go to macro visor comm it gives you just a concise summary So we are very close to the market open less than one minute away We'll digest some of that news as we get into it And we're moving closer to that 4,300 level as we approach the open here 4,306 on cash or SPX Down about three-quarters of a percent similar with the NASDAQ down about point seven percent and We are open here. We are getting a little bit of that Remaining bid from yesterday that buying into the close some continuation into the first part of the open here as we had talked about Let sellers are motivated. So we'll have to see how this goes Let's take a look at the NASDAQ because you know, it's going to be much more volatile and look it's living up to that promise and Certainly a little more excitement in this contract Let's take a look at rates Tepid bid we'll go back To our friend the spooze And you can almost fall asleep to the S&P when you compare it to the NASDAQ. I mean, it's such a different trading vehicle Yesterday a lot of the price action the S&P was pretty Snooze worthy as well Hey Nate, so I'm trying to understand your first question a little bit about how we are interacting with the book map You tell me a little bit more about what you mean. Are you talking about the resting liquidity levels in book map? So we are seeing a little bit of a sell down here 4,306 on SPX We've got a large resting bid down there that 4,340 255 contracts If we get pushed through that that's gonna probably be lights out So we got to watch this closely and what I mean by that is if we get through 4,340 and we continue selling and we continue seeing liquidity build below us Then it's likely we're gonna get some continuation on that So let's see this is getting interesting, especially because you know The bids from yesterday really didn't have too much of an impact just a slight bump We'll go over to our friend the NASDAQ here Getting sold harder than the S&P and it tends to lead. So this is important to watch You see liquidity building below on this thing as well. All right, we're going back to the S&P Nate you asked a second question. How do I interpret NQ book versus ES? ES seems much more useful and NQ orders seem to just band around current price. You're absolutely right about that I do find that ES is much more liquid. There's a lot more resting liquidity I think that has to do with the fact that market makers are hedging through ES and SPX is such an abundantly liquid options vehicle We're about 1.2 trillion of notionals traded through it every day and market makers are hedging those positions largely through ES I think that has a lot to do with why you see more resting liquidity there It's also just the center of the market the S&P 500 really is the Embodiment of the US stock market. I mean, I know you can look at the Wilshire 5000 or the Russell 3000 But no one really looks at those they really look at the S&P 500 And so I think there's just a lot more participation in this contract But I think the biggest part of it is the relationship to options because with NQ the closest thing that you have to a large Thriving options complex is not in NDX. There's no analog of SPX and NDX. It's really in QQ Q and So it's a lot different. It's a lot less overall volume And I think that accounts for some of why you don't see as much liquidity in the order book on NQ versus ES Okay, and they yeah, I understand exactly what you're saying now He's gone on to say that his basic understanding is that price gravitates Towards the high liquidity levels now. I would just say that yes, it does but it Gravitates towards those high liquidity levels When price is moving in that direction So there does have to be some underlying push to get there before we're just gonna you know Sort of get sucked into it like a magnet or a vacuum, right? And there's ways to interpret the price action because you may get to very close to a very large level And then suddenly reverse and the market avoids it And that tells you it doesn't want to get to that price that it actually wants to run away And that can tell you that that level may end up actually being more supportive So there is some nuance here to the analysis of large resting liquidity. Meanwhile, SNP 500 at 4309 ES at 4355 on the December contract right up to the hot call level that we closed at Yesterday, what's the hot call you might ask? That's the most active call strike on the SNP 500 chain and Yesterday's close had us at that 4355 level if we convert from SPX to ES and yes, these levels are converted dynamically So still kind of chopping around. Let's take a look at our friend the NASDAQ to see what momentum is telling us It's just sort of all over the map We are below this point of control. So that's not a great look We do see liquidity continuing to build more below than above also not a great look What's interesting, however, is there has been some tepid Institutional buying you can see that on the sub chart this iceberg order, but it's small 86 contracts is not a lot And so SNP catching a little bid playing around with its respective point of control just above it now And now starting to break above the VWAP And we're just in the first five minutes of trading Very volatile. Now. I'm not in any position at this point. I'm waiting for a more You know just a more decisive signal from this market about where it wants to take price And you do see a little bit of something different here. There's actually iceberg selling in the SNP Right and you do have some passive accumulation elsewhere in CBD. What is that telling me? Well, it's telling me just that there's just a little bit of institutional selling out This is not a lot to build off of right I like to see these numbers in the thousands and generally what I like to see is you know more stops getting blown out If we're making an upside move you get more shorts getting blown out and Institutions selling into that that kind of divergence can be very interesting. It can potentially set up for a trade We're not yet seeing that but I wanted to apprise you of it in case it does start to emerge as we watch price action And for those keeping a score at home the rounded delta between ES and SPX about 39 handles So you can convert between those levels Let's take a look here at rates seeing a little bit actually of a of a selling in this tenure contract Institutional accumulations kind of flatten out here You do see some folks getting stopped out smaller traders. There's that 256 contract stop out there, but it hasn't really done much It's still sort of in this range Our friend crude is also sort of chopping in this range But seems to want to move higher above the VWAP bouncing off of it above the point of control Let's see how that goes going back to the NASDAQ here it's finally Well, maybe temporarily here given what we're seeing at this moment But it's finally made a little bit of a push above this point of control Wasn't able to get quite to the VWAP here though at least not yet Getting a little bit of a pop in the Russell as well. I mean, it's not down quite as much But this thing has been absolutely beaten. We are seeing a pop here. However, there is a decent bid coming into this market We just pushed NASDAQ above VWAP. We had some shorts get stopped out there And guess what the resting liquidity below? It's gone So that's vaguely bullish Let's look at the spools Pushing above this VWAP here and holding so far building some volume. That's constructive You did see some shorts get stopped out here 272 contracts You can see that in the sub chart here That's that bright red line But we don't see the other thing that I would want to see into shorts being stopped out Which is the divergence of institutional participation at least not yet I mean basically, you know, if you're looking at this as a divergence play You'd say, okay, I want to see a lot of shorts get stopped out Push this thing higher and institutions slamming the sell button into that with icebergs And if you get a large enough Multi-thousand contract divergence between icebergs and stops over a 30 minute period Typically that means you have a higher probability of price following and if it does you've got a decent trade setup Particularly if you see options agreeing with you and we'll have that live contract data, you know It's it's actually starting to to populate here so yeah, we do have our live zero DTE data now populating and I have it on my charts here. It will be updated in book map Not too long but basically the most active strikes here on SPX are 4,300 which would be 4,339 on ES and 4,385 and that would be 4,424 on ES So the lower strike is that put at 4,300 the upper strike is a call at 4,385 Those are the most active options on the chain put call ratio to open is 1.5 Which is pretty darn bearish in terms of puts out numbering calls Jeremiah Jordan asks since the move down last Wednesday We've basically moved sideways in your opinion have sellers gotten a bit exhausted here Well, October bring a rally from this point as usual. It's a great question I would say that the first thing is I'm not yet seeing exhaustion. I was Doing a little presentation before the market opened about some of the factors I pay attention to and so I look at sentiment flows positioning various oscillators I don't see any sort of exhaustion yet I see more that we're in a sort of what I call the neutral zone in terms of sentiment and positioning and some of these Oscillators and so to me it tells me that there isn't necessarily a strong chance of a reflexive Rally from here because we're oversold I think it's more that you know price action is really going to determine where we go from here And it's it's pivotal that we hold 4300 SPX if we can't hold that level. I think we retrace quite a bit So that that would be kind of my call if I wanted to be constructive I would be looking for SPX to break above the 20-day moving average and show us a little bit of oomph here And we haven't had that so I think that October is is more going to be I Seasonality portends to higher levels of volatility and October is typically where the market bottoms and reverses So often you get a little more selling in October and then you get that sort of reversal from there I wouldn't be surprised if that's the outcome we see particularly with some catalysts leading into this October like the rising potential of a government shutdown the situation we have with these strikes at least at GM and the and and what is it Stalantis and then the Student loan repayments that are set to kick in next week There's some negative catalysts that could pull down GDP in the fourth quarter and then the fourth quarter is also the beginning of the Government's fiscal year So whenever they do figure out their budget if they can eventually they probably will see which lobbyists get the biggest priority over others But once they do there's likely to be a large amount of debt issuance And if you're looking at this from the perspective of any halfway competent treasury secretary You're gonna say gee shouldn't we issue more debt on the longer end of the curve because we're getting a decent premium discount right Like you're able to sell 30 year debt at a lower rate than you're selling one month debt You would be silly not to sell as much of that as you possibly can So it would be in my opinion surprising if we don't see more longer duration issuance less bill issuance in This quarter and remember this is a moving ball So whatever they announce it can still change and it often upsizes Usually within the first month or so of the new quarter they say oh by the way We're gonna add another you know 200 billion 300 billion of debt in here So I would expect that we still have room for rates to move higher and as a result I think we have room for equity is to reprice a bit lower I also believe earning season is going to be very important to watch because we'll see whether quarter two was the trough As bank of america and goldman sacks have said Oh, absolutely. There's there's An inordinate amount of incompetence and silliness going on right now. It's it's absolutely staggering And in fact in some countries when you can't figure out A budget they just dismiss the entire parliament or legislature or whatever And that would not be the worst idea here quite frankly, and I'm not even being political about it I don't care for either party if they can't figure out a budget or how to run our government So still just chopping here We haven't made any sort of decision In my opinion if we're taking this from the perspective of opening range, we're still in a range We haven't really broken out decisively either way For the s and p 500 futures contract on screen. We're just plugging around with vwap here And possibly the point of control below. Let's visit our friend the nasdaq And it is just back to being a chop shop We are now below vwap and the point of control But we don't yet see more liquidity building below a little bit, but not so much yet. Let's see how this goes It's not looking particularly great here though. If we take out this low and then asdaq I think then it starts to look at as a A downtrend day and possibly a good time to start looking for opportunities to fade So if you take out that low and then retest and get rejected I'd be looking for a short on that on the spools though. It's much less clear Let's zoom in just so it looks more exciting Wow, look at all that volatility right when you zoom in it almost looks like the nasdaq not really just having a little fun here Thank you, Jeremiah. Really appreciate your support my friend Oh, there absolutely could be anything can happen here I know some folks are betting short on this some folks are betting long on this I'm not betting anything on this because I haven't seen yet anything that tells me we've made a decision about trend So I'm still patiently waiting on the sidelines Let's look at rates chopping sideways Let's look at oil continuing to build move higher above vwap end point of control looks like an uptrend In crude here and nasdaq is still quite volatile. This is why I don't like to get in before I really know What the probabilities are and right now I don't have a strong beat on that for intraday And I will say for traders out there that find themselves wondering should I take the trade? Do I not take the trade? If you can't quantify your reward being about four times greater than your risk It's probably a good idea not to take the trade if you don't know how to qualify that then that's probably where you should start Nasdaq's looking pretty soft here. Just looking for it to take out this lower area We'll get some potential for follow-through Doesn't mean I would immediately short this. I'd want to see it build an acceptance below with some more volume traded below that Maybe a little pop to short into from there, but this is not looking great And es is following it's below vwap and the point of control with liquidity building below it You do see a little bit of tepid institutional accumulation of es here, but not enough to uh to get my attention And nasdaq is just just barely above its earlier low here Yeah, david very it's hard to have much conviction on this tape Just absolutely choppy Let's go back to the s and p here similar look Breaking above point of control, but below the vwap sort of a stuck in the middle with you theme right now We haven't really done anything decisive in that same range. We're just Stuck in that 15 minute opening range someone asked on the youtube. What am I watching in that 15 minute opening range? You know saying first 15 20 we haven't really done anything yet So i'm still looking for whether we're going to break down or above. It looks like s and p's Closer to breaking below that range. Let's see what nasdaq's doing. Yep nasdaq's just broke below the range Let's see if we can build some acceptance here, and then we may have a short opportunity particularly in the nazi And s and p sporting a similar look now breaking below. So yeah, that's uh, that's not looking so hot If you're long, but it's looking like we may be setting up for a decent Downwardly trending day here. So we're looking for a little bit of yeah, look at that. You've got now More liquidity coming in below on es And more liquidity coming in below on nq and you do have volume building below Telling us that sellers are really starting to take control of this price action So this is a point to take a short position in my opinion and then add to it on counter trend bounces That's what i'll be doing Focusing on es because that's my primary trading vehicle And you can see the hot put the most active strike is below us here It's probably going to act a bit like a magnet and have some pull And you have liquidity building up at that level too. I'm sure that's just a magical coincidence Options don't move the market or anything like that. Of course. I'm being entirely facetious You got a pretty decent amount of liquidity building below us here at s and p. Nazdaq looks even worse Let's zoom out a little bit. Oh, look at that. You've got a pretty decent resting bid here 14 750 this is exactly what you want to see If you're looking for a downward trending day all these things are giving us that impression Buyers will fight it, but if they're overwhelmed consistently then those are just shortable pops And you can tell i mean here's their first real fight. Let's see how it goes You see some institutional accumulation 858 contracts on the s and p And you see 567 stops getting blown out. So you do see that winding gap right And guess what level we're at. We're at that 4300 just over it by three points on cash If we break below it, I would add to my short This is the most important level here And that is one reason also why you have so much liquidity building down there This 4,340 bid is pretty much right at 4,300 on spx when you account for the delta So let's see if we get some continuation what I want to see is a breakdown below this resting liquidity at 4,340 Because that's the key strike. That's the largest level of net gamma exposure on the s and p But it's also a really important technical level on es and spx And of course we've got that resting bid there and below This is this coalescence as a compass theme that I talk about continuously until i'm blue in the face Because this is exactly what gives me confidence when I understand moving parts from multiple different vantage points I have a better understanding of the trade and better conviction to stay in it if it's working And more checkpoints to understand if it's not 4,301 80 on spx There is a fight here and we can expect a fight here There is some chance. We bought them here on the day. Don't discount that as a possibility. This is a huge level So if we don't break through it, I will cover my short That's why it's so important to see whether the buyers are able to put up a fight here and so far Not really I'd moat and really what I'd like to see is more institutional accumulation at this level. The iceberging is not particularly inspiring Nasdaq looks worse. There's no fight here. None Where's the fight? There's no fight Ah, there's a little fight See what uh crude's doing here still bid Rates Pretty flat Let's go back to spoo's. Yeah, it's quite the battle here Let's just take a look underneath the surface some of the details of the zero dte's that are happening And I've got to wrap this up in about five minutes folks. That's when the stream ends on book map So, you know, definitely tune in next Tuesday 9 a.m. Eastern. I'm here every week. I'm on the discord I'm on the youtube. I do really enjoy using book map If you like the product you can get up to 40 off by visiting traderade.com Slash book map and scroll to the bottom under specials If you'd like to check out traderade where we have this book map stream with all the information that I've added from our options algo You can get 30 off your first month or year using the coupon book map 30 at checkout And we're very focused on options In fact, you get a lot of options tools at traderade that I've personally either built or improved And so this doesn't look like the best day for the bulls overall 4300's challenged on the s&p. The nasdaq continues to move lower And it has been the leader. So when it moves lower, we should pay attention the nasdaq's now down 1.06 percent leading the market lower with the s&p down 0.84 percent and the dow down just 0.53 percent And on the s&p look, there's just there's no excitement from buyers at this level yet Maybe they'll maybe some will come in they certainly should endeavor to defend this level If they don't It's likely that things are going to get quite a bit more challenging Jeremiah, you are awesome. Always appreciate your support my friend And he is a genuine member of our service and he has been just Absolutely amazing Really really love helping people learn how to find their edge in trading I know that this is one of the most difficult things that we do Trading is not easy. It is mentally challenging And if you don't take good care of yourself, it can become physically challenging So one of the baselines that I always encourage everyone to do no matter how good you're doing no matter how bad you're doing take care of you Because if you're not in your best mental state and your best physical state You're not going to trade the market. Well, and if you do you're a you're an outlier Most people need to be at their best to do their best and that's about anything in life But it's especially true when things are emotionally and intellectually demanding And if you have to make high pressure decisions moment by moment Then you need to be at your best means a good night's sleep healthy diet regular exercise occasional meditation Take good care of yourself. Do not get emotionally involved with your trades Do not justify how well you're doing as a human being by your profit or loss Cut losers quickly ride winners as long as they're winning That's the kind of advice I can give because I've been doing this for about 18 years now And that's what works for me now I know what works for other people might be different But there are some baseline rules and one thing I've noticed for traders that are successful over time Is their discipline They do not take trades. They don't need to they don't grind themselves into dust on commissions and slippage They line up the reward to be significantly higher than the risk And they only take those trades And I know that sounds weird like some folks are looking at this like oh, it should be easy You just go in you make money. You drive a Lambo. No No, that's all nonsense and the people who put that stuff out there are generally lying The reality is this is a like it's like a sport. That's why a lot of people from sports actually do well in trading We are breaking this level by the way like little by little buyers are showing us no Conviction we're seeing that this order is being absorbed more and more. We're at 4301 on spx It's not looking so hot. Let's take a look at our friend the nasdaq I'm also not looking so hot There's really no excitement by the buyers to to get into this and we see liquidity continuing to build below The trend is lower liquidity is building below that tells us the trend is likely to continue moving lower So really it's going to be all about the s&p here. Do we get that continuation or not? And I've got less than a minute left. So I want to thank everyone for tuning in really appreciate it I think this is a fun stream today. We've got a very important level if we break that level I will be sizing up my trade. I've got a small position short es full disclosure And if we can't break that level if we start to bounce probably six points above here and build volume I will close that short. Otherwise if we break below 4300 on spx meaningfully, I will add to that short position So thank you everyone for tuning in it's markets in mayhem. You can check me out on the youtube I've got a book map feed there that's a little bit less than what you see here We've got the full thing over at traderade.com and check me out on twitter Check me out on youtube check out my work and come back next week at 9 a.m. Eastern