 Hello, everyone. Welcome to Options with Doug. Streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 p.m. Eastern time. Before I get started, I need to 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 involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. The focus of my presentation and the focus of the Options-Doug Chat channel and Discord is options, order flow, the impact of options markets on stocks and futures, and the influence of market-maker hedging flow on price action. I have a two-step process for trading, and the first is planning, and I use positional analysis. I look at how traders and market-makers are positioned in the options market and how those positions change from day to day to develop a thesis regarding the expected trading range and volatility for the day as well as a directional bias. And just to be clear, I will be talking about setups today, and I will be talking about setups in underlying assets, but those setups can be taken any number of ways. For example, on the S&P 500, setups can be taken with futures, spy shares, spy options, SPX options, or even futures options. So a lot of options for your trade setup, but again, I would just be focusing on the underlying asset for the setups, and again, my planning process is based on the options market. And the second step in my process is real-time order flow, and I look at real-time order flow and book is execution, and I look at real-time order flow and book map, and real-time market-maker hedging flow and spot gamma hero to confirm my thesis and for setups. All right, and questions and comments are welcome, and I will be watching the options dash dug chat channel and discord and the chat and YouTube for your questions and comments. And Sheena, hello, glad you're here, and Mike, hello, glad you're here as well. All right, let's get started. So what I want to talk about today, my agenda for today, and I'm going to change my format just a little bit. So first, I will talk about news items, data that came out today, and then data that's coming up tomorrow, and then just a brief preview of next week. Then I'll go through my positional analysis for the SAP 500 and then the NASDAQ, and then I will review just a handful of key setups today, and then my plan is to take a look at the current market and look for setups. And if anybody has any stocks or anything that any future stocks that you want me to take a look at, please let me know at that time. All right, so news items. Today, the PPI report came out at 830 a.m. Eastern time. There really wasn't much of a market reaction to that. And it looks like I think the primary number is this year over year number at the top. And that came in slightly less than forecast and slightly less than the previous number. And then tomorrow, the consumer sentiment comes out, Michigan consumer sentiment at 10 a.m. Eastern time. And then next week, there's a VIX expiration as well as the monthly options expiration on Friday. All right, so that is the, those are all the news items. And I guess there's also the debt ceiling talks going on, I believe there's going to be a meeting again on Friday. So this could take some time and probably, as usual, it will go down to the wire. All right, let's start with charts. Start with our positional analysis. And today, in book map, I'm going to start with SPI. And before I take a closer look at this chart, I'm going to take a look at a larger timeframe. I'm going to go with SPX here. And this is SPX in a thinkorswim chart showing SPX beginning in the month of April, up until now. So again, this is SPX. And let me point out some levels on this chart. So first of all, I have the lower and upper edge, the expected move for the week. And that's something that I set over the weekend. And SPX is trading just in the middle of that range. And then the, that's the dash purple lines. And then the dash blue line is showing the lower and upper edge, the expected move for the day. And note that level did act as support today, almost to the tick. So great, great support there. And this is, again, for SPX. And RJ, if you're here, this is based on the close yesterday and the expected move at the close yesterday. So this was set on my chart yesterday. And we'll take a look at a, a shorter timeframe SPX chart in just a moment. All right, so those are the upper and lower edges, the expected move for the day and for the week. And these are based on the options market. And then there's some key gamma levels in play. These are provided to spot gamma subscribers for a variety of platforms. And again, we're looking at think or swim here. So first, there's the put wall. That's the strike with the largest net negative gamma that can be expected to act as support. And that is also the absolute gamma strike, the strike with the largest absolute gamma. And then the volatility trigger is at 4115. And note SPX is trading above the volatility trigger now. The volatility trigger is spot gamma's proprietary gamma flip level. Below that level, market makers position on the gamma curve is negative. And in a negative gamma environment, they have to trade with price to hedge their delta exposure. And that tends to enhance or increase volatility. On the other hand, like SPX is trading now, above that level, market makers position on the gamma curve is positive. In a positive gamma environment, market makers have to trade against price to hedge their delta exposure. And that tends to subdue volatility. And then finally, here's the call wall at 4200. And that's the strike with the largest net positive gamma. And that can be expected to act as resistance. So there's the upper and lower edges of the expected move for the day and for the week, as well as the key gamma levels, the primary key daily levels, the put wall absolute gamma strike volatility trigger and call wall offer SPX. And good morning, Hector. Good afternoon for me. All right, see, and I asked you create those create those levels yourself, or are they from spot gamma as well. So on this chart, these are from spot gamma. So spot gamma provides a script. Let me show you. For a variety of platforms, they provide these levels for a variety of platforms in a in a variety of formats and for a thinkorswim. It's in the form of a it's in a form of a script here. So all I have to do in the morning as I open this up, I added it. So I delete everything that's in there. And I have to paste in the new script. And I do that every day. And it's for all the index products. So I only do this once for for all the index products. All right, let's take a look at. So again, these are from spot gamma. Then I'll when we look at book map, I'll show spot gamma levels for ES and NQ as well. And she asked, can you have an uptrend with negative gamma? Yes, absolutely. Negative and positive gamma really don't have much to do with with direction. It's more with volatility. Positive gamma environment, I'm expecting a trading range, a lower volatility environment and a negative gamma environment. I'm looking for more volatility, a wider trading range for the day. All right, so let's take a look at another SPX chart now. I'm going to go to a one day, one minute chart. First of all, note this is the lower edge of the expected move for the day. And this is something that I added to my chart yesterday before the open. And note it is acted as support. And then also here's the volatility trigger. And right now SPX is trading slightly above that level. Now this spy volatility trigger is 413. And spy is trading below that level. So the key for this chart for today was the support at the lower edge of the expected move. All right, let's take a look at book map now. And we'll talk about setups in a few minutes. I'm still going through my positional analysis looking at the levels that I expected to be in play for today. All right, so here's the spy. And I want to point out this is the RTH, the cash open. And this 412, this is the absolute gamma strike for spy, acted as resistance. And price dropped quickly down to this 410 large gamma four level. And note this level lined up just about exactly with the SPX 411 lower edge of the expected move today. So a confluence of levels there that did act as support. Again, the SPX 411 lower edge of the expected move as well as the spy 410 large gamma four level. And also to point out the 411 level in between. And that is not a gamma level, but it did act as resistance here and then support. So the spy levels have definitely been in play today. And Hector asked, how much sensitivity do I use on the heat map? And I, for spy, most of the heat map is just noise. So I, this is what I use for spy. I really cut off most of the heat map in spy. All right, so that is the, that's spy. Let's go take a look at the ES Futures now. And I have a couple columns of notes here, levels. First of all, so Sheena, here's the spot gamma levels provided for book map. So they're provided again for a variety of platforms. Here they are for book map. And they're in the form of cloud notes that are updated automatically. And right now it looks like the spot gamma is using a 14 point difference between ES and SPX and that point difference changes every day. And I calculated it at 12.5 points. So on my column of notes here, cloud notes, these are my notes. I'm showing that 15 volatility trigger down at 4127.5. All right, so Hector asked, why is there so much noise on spy? I think it's just the constant arbitrage. I think the heat map on the ES Futures is much more meaningful than the heat map on spy. So a sharp drop, I don't know if anybody knows if that was any news. If somebody has any information on news that might have caused that drop, let me know. All right, so let's take a look at a couple of other levels here. So there's the spy 410 level, 410 large gamma 4 level, and also the spy 412 absolute gamma strike acted as resistance. And then the spy 410 acting as support along with the lower edge of the expected move. All right, she is going to ask, is there a formula or rule for correlating spy levels with SPX? I used to calculate it by hand, and now I have some think scripts. This is in, let me show you my spy chart. All right, so this is think or swim. Turn that off. All right, so this is think or swim showing a variety of think scripts. So this is showing the ES to spy ratio. That's about 10.053 right now. And this is showing ES minus SPX. And this is the SPX to spy ratio. All right, so those are think scripts. I have posted these in the options dash dog chat channel and discord. So they're available. Just if she and if you're not, if you have not joined us and think discord, I invite you to and think scripts are posted in the options dash dog chat channel, and I've pinned them there. All right, so those are the levels that are in play for the S&P 500. All right, let's take a look at the NASDAQ. So I think the, for me, the S&P 500 was an easier read today with the levels acting as clear support and clear resistance, not so much on the NASDAQ. So let's go take a look at one other chart. Here's QQQ. And this is showing, this is a one day, one minute chart for QQQ and showing the Spot Gamma levels. And this is the think script, the same script that Spot Gamma All. That's what I called it. And it's displayed again for all the index products. So there's the volatility trigger. And really it looks like QQQ has chopped around the 325 level. And yesterday, 325 was the call wall. And today it's a large Gamma 1 level. So it's an important level for QQQ. All right, so that is the, that's the positional analysis or starting at looking at the levels in play. Let's take a quick look at shifts in levels. And while I do that, I'm going to go take a look at the absolute Gamma levels. So let's start with SPX. And this will show where those levels come from. So first of all, for SPX, 4,000 is the absolute Gamma strike as well as the put wall. And the put wall did increase from 3,900 yesterday to 4,000. So that's the strike with the largest absolute Gamma as well as the strike with the largest net negative Gamma. And this chart is showing positive Gamma or call Gamma with the orange bars and negative Gamma or put Gamma with the blue bars. So that is the, that's the floor as well as the absolute Gamma strike. The call wall is at 4,200. It remains at 4,200. That's the strike with the largest net positive Gamma that can be expected to act as resistance. And then the volatility trigger for SPX shifted slightly higher yesterday from 4,110 to 4,115 today. Alright, that's SPX and the shifts in levels. Let's take a look at SPI now. I'm going to zoom in on this chart. Alright, for SPI, the absolute Gamma strike did move up slightly from 4,10 yesterday to 4,12. So that's the strike with the largest absolute Gamma. And then the put wall remains at 400. And then the call wall remains at 4,20. So there's the ceiling for SPI and the floor. And then the volatility trigger shifted up slightly for SPI as well from 4,11 yesterday to 4,13. Alright, let's take a look at NASDAQ. And I usually have to do a refresh. So I'm just going to go ahead and do that. Let's go to NDX. And NDX, this is shifted significantly. And the 12,975 strike, not shown on this chart just below, just off to the left, is still the call wall and the key Gamma strike. But the put wall shifted up from 11,000 all the way to 13,175. And that is shown here. So that's the put wall, the strike with the largest net negative Gamma. And that's actually above the call wall and the absolute Gamma strike. And also there's a significant Gamma at 13,000 and 13,500. And then finally let's take a look at QQQ. QQQ, the absolute Gamma strike is at 320. And then the put wall is at 315, the same as yesterday. So there's the floor. And then the call wall shifted higher from 325 yesterday up to 330 today. So that 325 level right here that we just, we looked at the QQQ chart. That was definitely in play today. And then again here's the put wall. And also, so the call wall shifted higher for QQQ. And also the volatility trigger shifted higher from 321 to 324. All right, so those are the absolute Gamma levels. Let's take a look at one other chart. You know, take a look at the Vana model. And this chart is showing how market makers delta notional shown the vertical axis changes with changes in price shown on the horizontal axis. There are two curves on this chart. The light gray shows how market makers position on the Gamma curve changes with changes in price only. So this is showing market makers delta notional will change, will increase as price increases and also as price decreases. And let me just check on the price of SPX. Right now it's about 4117, 4118. All right, so that is the light gray curve just showing the impact of price on market makers delta notional. And then the pink curve adds an implied volatility to the equation. So this is showing how market makers delta notional changes with changes in price and implied volatility. And what this is showing is if price increases market makers will have less delta notional to hedge on the way up that this light gray curve predicts. And then on the other hand as price decreases they will have more delta notional hedge. So here when these lines are rising market makers will need to sell futures. And then on the other hand as prices dropping and line rises market makers will need to sell futures to hedge their delta exposure. And then finally SPX is trading right around here now 4118. So this is showing that if price decreases market makers delta notional will increase and they'll have to sell futures. And then on the other hand if price increases from that point they can buy back their short hedges. So up to a certain point that will tend to be a tail end for price. All right, so one other thing that I want to take a look at and then we'll take a look at some setups is this spot gamma gamma index just to get a further sense of how market makers are positioned on the gamma curve. And this is the spot gamma gamma index for SPX, SPY, NDX and QQQ. And this is a proprietary measurement of gamma the total amount of market maker gamma. And a positive reading indicates market makers position on the gamma curve is positive. And again in the positive gamma environment they have to trade against price to hedge their delta exposure. And so these numbers did shift higher from yesterday still slightly negative for SPY and positive for SPX and then also positive for NDX and QQQ. All right, let's take a look at some setups now. And the first thing that I'm going to take a look at is the spot gamma hero. And by the way, and it looks like we just missed it, this divergence long setup. Let's just go take a look at book map at ES, see where that. So down to the 413 zero gamma level as well as the lower edge of the expected move for ES right here. So there would have been a nice long setup. Let's go take a look at hero and notice this did act as a leading indicator. It didn't give you a lot of time but as price approached that level traders started taking positive delta positions and then price reversed higher. And now it looks like traders may be taking negative delta positions as heroes ticking down. So for those of you who may not be familiar with this chart this is spot gamma hero. Hero stands for hedging impact of real-time options and this is showing price with a white line and the options trades and market maker hedging activity for a combined signal for the S&P 500. This is combining SPX, SPY and ES futures options trades all into one combined signal. And this for the S&P 500 especially can often be a leading indicator of price. Alright, so there's the total signal. I'm looking at the notional value over on the right here that's about 450 million. Let's take a look at the individual components and then I'll take a look at that as closer. So there's the SPX and that is negative minus 650 million. So that's SPX, SPY positive 1.28 billion. So that's a notional value. And then ES futures also negative minus 200 201 million and net net still positive. Alright, let's zoom in on this. And first of all I'll talk about the couple of setups here. First I talked about the reversal, the sharp reversal at the open, at the SPY 412 level. There really wasn't enough information at the open in HERO to make any decision. So there was no contribution from HERO, market maker hedging activity and options trades for that short at the open. And then there was for that long setup and it took a while to play out as Grasshopper pointed out on Discord this morning. It took quite a while to play out but it eventually did. So notice that traders were taking positive delta positions and then again it took quite a while to play out and PICE finally reversed or moved higher off of that SPY 410 level and the SPX 411 lower edge of the expected move for the day. PICE finally moved higher. So Sheena asked regarding HERO when would you consider a possible entry on the long side in SPX SPY because it was clear on the chart after the fact. So looking at this for example, this long setup, it was clear that traders were taking positive delta positions from the open and then it was just a matter of watching book map, looking for levels for a potential reversal and then this happened an hour and 15 minutes after the open. So this was very clear and it was acted as a very strong leading indicator. So this is the kind of setup that I like to trade where HERO provides a clear signal well in advance of a reversal. So once I see this signal, the next step is to go to book map. Here we have the ES going to zoom in and then I'm watching order flow. So I don't have the SPX 411 level marked on this chart but I'm looking at that chart, looking at this chart and note the shift in order flow here. First of all there was this first test of this 410 level and also the SPY 411 SPX 411 and then a slightly higher low. So Sheena asks, is HERO followed by book map the most important pieces of your trading strategy plan? If I had to rank things, I would rank book map first, especially for futures. There's just so much information that the order flow is typically very easy to read. So I'm looking at order flow and book map, these levels that I expect a reaction at price. These are the levels that I want to get involved and I can see the shift in order flow here. I'm looking at the shift from scroll to the left a little bit. Oops, didn't mean to do that, sorry. I turned that off. Alright, so let's go back to that. Turn that off. Alright, so I'm looking at shifts in order flow. So I know that traders are taking positive delta positions and based on experience with the SMB 500, I don't necessarily expect immediate reaction like I would for Tesla, for example, or Nvidia. I know this can take some time. Alright, so again, I know that traders are taking positive delta positions. I know that market makers position on the gamma curve is positive and they will be trading against price to hedge their delta exposure. So I'm expecting a lower volatility day today. I'm expecting a trading range today, not a trend day. So there's the first reversal and then this one, the second, around 1045. And again, I'm noting the shift in order flow. Notice all the green dots, green volume dots, market buy orders coming in. First of all, that 410 level and then a second chest, now at the lower edge of the expected move for ES as well as the 413 zero gamma level. And I have a primary target above that I knew that was resistance as before and that is the 412 absolute gamma strike for spy. So it's a matter of looking at everything. But again, if I had to rank, it's hard to rank things, but I would rank book map first. I'm looking at these key levels, looking at order flow and then the hero is just a very strong confirmation that price may reverse higher. Alright, so that is the SPX. I want to take a look at a couple of other setups and then we will go back and take a look at the ES or Nasdaq and see what's going on now. Alright, so the first setup that I want to highlight, these are some of just the key setups that I saw today. First of all, Amazon. Going to separate out, put some calls. So if you're looking for a long setup in a stock, this is what you want to see. So this is showing traders are buying calls. They've been buying calls pretty much from the open and prices are responding. This notional value, 104 million. And they're also selling puts, but calls are having a much stronger contribution to the price action. So when traders buy calls, market makers sell the calls and they have to buy stock to hedge their delta exposure. So that's Amazon. Let's go take a look at book map. And there's the chart in book map. Pullback entries, as traders were buying calls and selling puts, liquidity targets at 112, 113, 114. And Sheena says, I noticed that on book map as SPX hits resistance, the downside volume is greater than the upside. Why does that happen when the issue is trending? So first of all, SPX is not shown on book map. There's no transactions in book map. Are you referring to ES or SPY? And I would say in general, often volume on the downside is typically higher than volume on the upside. Alright, so that's Amazon. And the next setup that I want to highlight is Google. Very similar to Amazon. Alright, so Ron asked, can you tell if calls are being bought versus puts being sold? Alright, so let's go take a look at Hero again. So these lines, orange shows calls, blue shows puts. They're in terms of delta. So our rising line indicates positive delta. And a positive delta options position, you're either buying a call, that's positive delta, or selling a put. Those are both positive delta positions. On the other hand, if you're selling a call or buying a put, those are negative delta positions. So I'm looking at the, for example, the orange line is rising. That's pretty clear. And also looking at this notional value here, that's positive. Positive delta, traders are buying calls. And this is also positive. Although it's pretty flat, especially compared to the call line. So that's showing that traders are selling puts and buying calls. Alright, so that's Amazon. And we'll just leave it with the calls and puts separated. Let's go take a look at Google now. They're in a similar chart, especially in the morning, except in this case. So they were buying calls in the morning. Now that has leveled off and prices leveled off. Actually down trending a little bit now. So this number is positive 158 million. And this number is negative. So they're buying calls and buying puts. This call number is greater than the put number. So the call buyers are winning. And especially in the morning, there were more call buyers than put buyers. Let's go take a look at BookMap from Google. So there's Google that sharp rise in the morning. Let me just get a new version of this absorption and sweeps indicator. I need to make some adjustments so we can actually see price action. That's what all these numbers here, that's the absorption and sweeps indicator. See if I can just tone that down a little bit. Still not enough. Alright, that's a little better. So there's the sharp move up right in the morning and then price. There's the sharp move up in the morning and then price just chopping around now around the 117 level. And finally, let's take a look at Meta. Pretty similar to Google, a sharp move up in the morning and now chopping around the 237 level. Let's take a look at Hero for Meta. And again, traders are buying calls in the morning. And when traders buy calls, market makers sell the calls. They have to buy stock to hedge their delta exposure. And there's just not much going on with the blue line with their net net slightly buying puts. So that blue line at minus 8 million and the call line 106 positive 106 million is much stronger. So that was driving price action up until about 1130. Traders stop buying calls and then price just chops again around that 237 level. Alright, so those are the stock setups that I wanted to highlight. Alright, let's see. Let's take a look at what's going on now. So I'm going to take a look at NASDAQ first. This is a combined signal of NDX and QQQ. And typically QQQ has much, much larger notional value than NDX. But Spot Gamma does provide this combined signal. And actually today, NDX is showing a positive 48, 46 million versus and also positive 78.9 million for QQQ. So NDX is contributing today, but now trending lower. It looks like there was a nice divergent signal here. Hero dropping lower and then price drops. And again, this took a while to play out. So a divergent setup again that took a while to play out at price reverse lower about 1245. So let's go take a look at NQ now. So really it looks like the level to lean against that might have acted as resistance was the NQ13450 level. So let's take a look at what's going on now. Looks like a trend break here. Price is shifting lower. Let's go back and take a look at Hero. And just as a point of reference, when I'm trading, I have two screens. I'm only presenting on one, but I have two screens. So I don't have to jump back and forth between hero and book map. I'm looking at both at the same time. So it's a little bit clunky here in my presentation to jump back and forth. All right, so let's go back and take a look at Hero. So we know this was a short set up just around the NQ13450 level took a while to play out. Now, Hero's shifting lower. Let's change this. And RJ asked, is all the volume in QQQ Hero for NASDAQ? And today it's not. I just showed in the watch list that there was a significant notional value in NDX. Let's just see if we get more insight with this 30 minute look back period. So to me, it's right now a little bit unclear. Let's go back to one day. So right now looking at the one day, this is showing Hero's shifting lower. Let's go back to NASDAQ. Actually, to answer your question, RJ, we can just take a look at this number right here. NDX, positive 45.98 million, now 46 million, QQQ, 52 million. So notional value is about equal, adding up to a total of 101. All right, let's take a look at the S&P 500. So looking now, this was clearly a divergence that took quite a while to play out, with finally this gradual trend and a sharp move lower. Price is trying to recover. And it looks like overall this trend for Hero is positive. Let's go take a look at book map. So now it looks like QQQ. That was just a pullback heading up to the 326 level as well as the 13,450 level. No CVD as positive. Also, there are some buy-stop orders. This orange line is slightly rising. So here was the short setup that I talked about, a series of lower highs, a final test of the 326 and the 450 level, and then that sharp move lower down to the 325 level, also 13,400. And now potentially heading back up for a 50-point move higher in NQ. Let's take a look at S&P 500. So the S&P 500 moving higher, CVD slightly rising, and then remember this 411 level has been in play as support and resistance. Now active as support. Let's go back and take a look at Hero. Alright, so the primary setup we did miss. I was still going through my positional analysis. Is this divergence long with Hero rising? And then now this worked very quickly, less than five minutes before the S&P 500 moved higher. NRJ asked, is that on the 30-minute look back period or the one day? And it's the one day. So now Hero has leveled off and maybe let's go back and look at price so we know that still Hero is slightly uptrending. So coming up on VWAP here, it's this light blue line. And then the next level up above is the 412 level. So here's your initial entry on that divergence higher. And one thing to note is the... Let me clear this. Look at confirmation in book map. And this primary confirmation is this iceberg. Two iceberg orders, two executions. Excuse me. Two executions, 1,224 contracts. This is what larger traders use to hide their size. And then a secondary entry at that 411 level. Again, that we knew acted as support earlier in the day. Alright, so pretty good read there in the S&P 500. Let's go take a look at NASDAQ again. So NASDAQ trying to make it up to the QQQ 326 level. Alright, so RG says the 30-minute on NASDAQ had a nice divergence. So let's go take a look at that. Let's go back to NASDAQ. So now we see hero for the S&P 500 is trending higher again. Let's go to NASDAQ. And now NASDAQ, the signal is trending lower. RG says look at the 30-minute. So here in this case there's a divergence long. Note that hero made higher low. Price made a lower low than responded higher. And now hero is moving lower. Alright, so we got not much time left. My time is about up. Let's go take a look at NASDAQ. I'm going to change that back to one day. So for NASDAQ here, I would just be watching order flow for potential reversal lower. I'm just looking at market internals. I don't see any clues. Alright, so uncle is asking about the big liquidity price at $41.20 and $41.24. He's talking about this right here. And I think right now it's interesting traders. Somebody wants to get long at that level. Those are resting by orders. I don't think it's having much impact on price right now. And if price starts to move lower, that could act as a target if those orders stay in the order book. And last question, does it give you any pause if NQ and ES are opposing each other on hero? No, not really. So usually I'm trading one or the other today. I focused on ES. I thought the levels were more clear in the morning, especially that reversal higher at the SPY410 SPX4110 level. Alright, my time is up. That's all I have for today. I want to thank you very much for watching, for your questions and comments. And let me know what you thought about my approach today is spending more time on the current market. If you found that helpful today, please let me know. And I will start to do that in the future and spend less time going over setups from the morning and looking more at the current market. So again, thank you. Thanks for your questions, comments. And I will see you tomorrow. Bye.