 Hey folks, good morning out there. Just getting the stream all set So We can dive right in should be fun. Hope everyone's having a good trading week so far We're gonna be going live talking about what's going on around the markets here All right. Looks like everything is live here So welcome All right, so we're gonna talk a little bit about what's going on around some of these key markets this is a Broadcast I do every Tuesday at 9 a.m. With our partners book map really love these folks So we'll talk a little bit about me first My real trading journey began in 2005 funding my own account trading stocks then moving to options futures and forex I navigated through the great financial crisis had a lot of great trades a lot of terrible trades during that time But really what that was for me was a formative experience to learn and appreciate the value of combining technical analysis with a more systematic approach with an eye on macro and the financial plumbing and Using that to shape more of my trade ideas, especially on a swing time frame So that was part of the reason that I started to really get into looking at other asset classes looking at long short strategies and other kinds of ways of approaching the market and So my approach shaped from that experience is more systematic It's driven by momentum price action options flows Positioning as well as volume profile then I like to zoom out I like to look at the big picture and one of my mantras for swing trades is Momentum and macro equal opportunity when you have both Aligning saying the same thing you can get some pretty incredible results over longer term trades I began working with book map in early 2022 Because I saw great value in the way their platform including the heat map icebergs and stops Added to my ability to understand what was happening underneath the surface inside the market, right? And as a result of that I've been able to Focus more on finding ways I could add value to the book map platform. And so for me that's been all about Building a plug-in called the advanced spx options visualizer Which allows us to dive in and look at the options flows and how they may be having an impact on the broader market And we'll talk about that and we'll look at book map We'll look at a number of different futures contracts equities bonds We'll be looking at commodities as well as some of the key stocks out there But before we dive into that we're gonna go through everyone's favorite part of my presentation This is where I read the 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 is not suitable for all investors past Performance is not necessarily indicative of future results. So you get the point Do your own homework. Don't just blindly follow anyone including me. So let's talk some charts First on screen, we've got the SNP 500 and pre-market this morning. It is still below this key trend line We lost that trend line last week. We've kind of played with it a little bit But remain below it. We are above the EMA 21 and the SMA 20 That's your exponential 21 day moving average and simple 20 day moving average But we are still below this trend line And I think it's important because this has been the uptrend line for all of 2024 Right so losing it's kind of a big deal. We're kind of building acceptance below it the more we trade below it So I do think we're seeing a little bit of change of character here in the momentum of these markets And I think that's pretty important to take into consideration Because it has implications how are stocks gonna trade in this environment where that uptrend is a little bit more fragile, right? So something to take into consideration because we see similar elsewhere as well We're gonna go over to the SNP's high beta brother the Nasdaq and it also lost its trend a little bit earlier It's been struggling to get back above that EMA 21. It is above it pre-market today Yesterday closed just marginally below it, but we did lose that key trend line that was also the Nasdaq's trend line for all of 2024 Why does that matter to me? Because the Nasdaq's been the momentum leader for some time So both of these major indices are telling us the same thing some degree of caution is warranted Is is the sort of rally completely over and we're all gonna die? No, nothing like that, but we see yellow flags that we need to be aware of Maybe be a little bit more cautious There's still attractive opportunities hedging three and six months out at the money puts in SPX at the money calls and VIX So those are some of the areas I'm looking to hedge out some of my long-risk, okay? Now let's look at something that may surprise some folks. The Russell is the best looking of the three I'm just adding a moment of pause there for the people that might be shocked Gasping right, but this is interesting the small caps have actually been pretty darn resilient particularly an environment of Pretty high rates rates that are rising, you know almost 40% of the Russell 2000 doesn't make any money Then you've got the finance component the regional banks. They have a lot of exposure to long duration So there's almost half of the Russell that's very rate sensitive and nevertheless it is grinding higher So that relative strength is something to pay attention to the Russell's also a favorite short for hedge funds Which is one of the reasons that when the Nasdaq's getting clobbered sometimes the Russell catches a bid It's almost a little counter-intuitive unless you look at the way that de-grossing Happens right if you're in a very very leveraged long book a long short book as a hedge fund your long Nasdaq your short Russell And that trade goes against you you're covering your Russell short That's boosting the Russell as the Nasdaq goes against you and you sell into that weakness Next chart we have on screen is the tenure note futures We can see that it is just finding resistance at what was once a pretty key level of support I think this is important too. I still feel like rates in the long end could continue to move higher here I've discussed in the past four point five percent Potentially being a line in the sand where risk assets begin to perk up and take notice how much rates have appreciated But we'll also talk about real versus nominal on a later slide. It's an important distinction to make So nominal rates are on the rise real rates serve pretty stable and we'll talk about that and what that means a little later On but nevertheless, we do have a 10-year auction this week I believe it is tomorrow with the CPI data release just after 1 p.m We'll get the results that'll be an important litmus test. We also get fed minutes tomorrow at 2 p.m So it's gonna be a jam-packed day of different event volatility catalyst Certainly something that we should be keeping an eye on And in my opinion, I think that we'll get some pretty decent clues this week as we get CPI PPI three major treasury auctions of about 120 billion dollars in size fed minutes and otherwise We'll get some better sense from the rates market as to what its opinion is But we do see some changes. We'll talk about in terms of expectations in just a little bit here The next chart we have on screen is silver We've been talking about silver quite a bit. So this week I decided instead of the gold chart I'm going to go to the silver chart. We all know gold's up up and away and it just continues to make all-time highs You know, and everyone's sort of aware of that or at least it's getting greater attention Although it's not the buzz that it would be if we were sort of nearing a sentiment top in my opinion People are still pretty darn under allocated gold and silver. Well, silver's got my attention So a bit of a backstory. I've been trading precious metals since 2006 So I do like to look out for some of these types of moves here There's a lot of headaches, particularly in silver. So you got to be real careful with this metal I don't think this time is a head fake Now, maybe I'm going to go out on a ledge and and and hang myself from saying that, right? But this move has been Extraordinary and it's backed by two different sources of demand increasing investor demand And increasing industrial demand because silver is a dual use metal It has both the industrial uses and people like to hold it as a store of value Some call it the poor man's gold, right? Nevertheless, we can see here. We are at a major inflection point for silver It's had a very impressive run so far But now it is pushing up and just for those watching this is a monthly chart Now it is pushing up into a very key level of potential resistance I would expect some some Higher potential for consolidation here. I don't know that we're just going to zoom right through the zone If we do it's incredibly bullish. I mean this rally in silver is called a lot of folks off guard This is the first rally in silver that I've actually believed in a very long time Right other than the covet low kind of, you know resumed to where prices were rally that we had in 2020 2021 This rally actually looks like one of the best technical setups for the metal I've seen since 2010 2011. So I'm looking at this very closely I think if we can break above these current levels of resistance We do see the potential for this thing going over 30 and potentially over the longer term Retesting some of those all-time highs again. It's all about investment and industrial demand. You've got to have both We do have the ladder because you've got more infrastructure more solar projects more military equipment A lot of other areas that are demanding of silver communications equipment. Those sales are rising as well So we'll be watching that metal. Let's move on to copper another metal that has my attention because like silver It's breaking out of a long-term trading range and it looks really really well positioned here to continue moving higher By momentum strongly favors the buyers here. This is an area that we identified Basically just about three four weeks ago as this breakout was really starting to build and saying, you know what global copper miners Have our attention here their relative strength versus the world stocks, you know vti So cop x versus vti if you want to plot that on a ratio chart, you can see the strength You can see the appetite the accumulation that's been happening there And for me that makes it a very attractive area to invest We know that there's a significant deficit of copper Right, that's something we keep hearing about. We don't have enough supply. There hasn't been enough production There certainly hasn't been enough exploration. So if copper demand really does kick into full gear This just may be a preview of what's to come The next one we have here is crude oil. This is one we've been talking about pretty much all year long Right and crude oil has been an absolute winner. It's gone bonkers There's been a lot of people that were bang against it calling for 40 50 oil That ended up being a bit off base because there is more demand than supply We do see a global economic cycle Forming in emerging markets in its earlier stages as central banks are cutting rates It's stimulating demand and then we have geopolitical tensions that are increasing the appetite for oil for gold for silver for bitcoin and otherwise and also You know, this has made energy one of the best investments of 2024 This is an area we've been early on and talking about for some time There's been a lot of great winners in this space Similarly, you know, we believe that this has potential to continue running and I'll just throw another little outlier there I know there are folks out there that have absolutely been beaten down mercilessly in natural gas I've got some good news for you 75 of the time natural gas is up in april with an average gain of about 4 It's the most favorable time of year for seasonality of the stuff I like xop. I like fang. I like other stocks in the natural gas and overall energy space I think that they may be due for a little bit more of a continuation here And then finally we've got the dollar index and boy, it just can't decide what it wants to do It looks a little toppy here Although i'm going to see whether or not it closes below 103 81 pretty darn close But it's starting to look a little bit toppy here. I think that it's consolidating I don't know that this is necessarily going to be it getting ready to give up We do have an ecb meeting. I think it they'll be talking about their policy on thursday We also of course have fed minutes on wednesday along with cpi. We've got all those auctions What happens to the dollar is really a function of what happens to rates to no small extent So i'm really watching what happens with the tenure and how it reacts to all this data And the auctions particularly for it To see where we may get some clues for the dollar the ecb meeting will be important as well Because we'll get a sense as to when they plan on cutting at macro visor We're looking for june for the ecb to start their cutting cycle the fed to follow and then the the boe to go last And s and p 5200 That could be a pretty sticky level It is the second largest full chain positioning level That we're watching very closely the first is of course 5 000 Right the second as you can see on screen is 5300 when a level has this much options exposure It can be a bit magnetic It can act as a key area of support as well And if we push below it it's a mighty volatility trigger that can unleash not just selling but just more Erratic trading right as you have dealers repositioning as you have folks that were in these options trades repositioning So i would just be mindful of that as well watch that 5200 level not just today But really over the next week or so, you know, particularly as we get closer to options expiration and speaking of options Skiu is pretty low. What does that mean? It means this is not a very well hedged market If we're looking just at skew across the entire chain It is at levels that are pretty darn low versus positioning, which is pretty darn stretched along with sentiment So this just tells us there is a heightened risk that if momentum is to shift lower as we saw at the s and p and nas act We're kind of close there losing those trend lines that sellers may be a little more motivated Because you have a lot of positioning that's been added above 5 000 added into record highs Which is fine except for that positioning isn't well hedged And so if sellers come in and start to take control of momentum You've got a lot of motivated buyers that are poorly ensured against downside that could begin to distribute into that Adding to that downside. So it just increases the risk of a potential correction in price time or both Next up gold bitcoin and stocks Love low real rates Okay, real rates by this measure Are about negative two percent on the two year Why does that matter? Well, it matters because that's one of the reasons that we can say that financial conditions Monetary policy none of this is tight or restrictive or anything like that Right, especially as we see inflation starting to come back up We see some key commodity indices up anywhere between 12 and 17 percent from their quarter four lows You've got oil copper gold all these things rallying significantly alongside stocks And housing prices in many areas are continuing to go up particularly in the more expensive housing So what does that tell us it tells us that we're still in a regime that is pretty easy and in an easy money regime Gold can keep rally Now what's interesting about this is with all the turnabout in inflation data We're starting to see the market repricing the resolve of this Fed Remember we started 2024 even before the year began with six cuts priced in was a little much And so now we're starting to see that get priced out now. There's just two cuts priced in with the first cut most likely in July And uh, I think that makes more sense quite frankly the second cut is more likely to come in November or December rather than September now September is more of just a coin toss at this point similar to June So wouldn't that be interesting if we have a lot less cuts than what is expected Given that if we look at the real dual mandate of the Fed Which is maximum employment and price stability We can say well by the measures they look at we're at or near maximum employment And with inflation showing some signs of perking up. We don't have price stability So it calls into question. What is the real mandate of the Fed? Well with deficit spending soaring and no small part because of rising interest costs Maybe one of the third legs of that dual mandate Is monetizing the u.s. Government's debt despite what Bernanke said in front of congress You can make a pretty compelling case that that's a big part of what's happening here So next up we have the treasury short is almost non-existent jp morgan polled investors That use their clearing services, which is a large amount of high net worth investors money managers hedge funds and so on No one wants to short and i'm talking net short. I'm not talking about the basis trade I'm not talking about commitment of traders where they're actually long, but it shows us really big short position I'm talking about actual net short. No one wants to net short The treasury market here That's a little weird Considering that treasuries just keep falling and falling the downtrend is pretty well established in a lot of these things You know, we took a look at uh, uh zn earlier, but you can see it on any of these charts You know rates have hit on the longer end. They're highest levels of 2024 yesterday So it is interesting. I'm still of the mind that again the long end can keep creeping higher So I think there is opportunity for downside momentum to continue But this week will be pivotal to deciding that based on some of the data and supply demand information we get And central bank gold demand has helped to offset declining retail sentiment. This has been pretty interesting. This is the most robust two-year purchasing period for central banks buying gold ever Right now with gold the way I like to look at it is when everyone, you know is talking about it when it's on the news Every night when there's all these buy sell gold commercials and stores coming up everywhere where retail premiums get absurd And people are still buying that's when you get closer to a sentiment top We're not there yet. Uh, just based on my two cents I could be wrong, but having traded this market since 2006 I've seen a lot of gold hype cycles and we're still in the earlier stages of it. It's not getting as much coverage It's not being talked about that much. The premiums are rising, but they're not absurd And the buy sell gold store thing that indicator still has some room to go And silver boy, it has some room to catch up to gold. Doesn't it look at the comparison between gold and silver here Silver is very cheap So there's been folks out there and I agree with them saying silver's got room to catch up I'm right on board with that. I think if gold keeps pulling higher Silver can do what it likes to do which is where it just likes to rise by You know kind of silly amounts day after day after day as it goes parabolic I don't know if that's exactly what's going to happen next But the the odds of that happening are extraordinarily high That is to say I favor more upside in silver, particularly if we can decisively break above some of those multi-year resistance levels that we looked at earlier And geopolitical impediments to opex ability or desire to deploy spare capacity pose upside price risk So if the straight of her moves was to be closed for just a month That could push the price of oil up over $15 a supply crunch from iran could push up the price of oil by about $7 a barrel opec extending cuts through 2024 could also push up oil by about $6 a barrel So these are all important considerations, right because we are in an environment now Where there's a lot more upside risk in oil than downside risk the biggest downside risk is an amelioration of geopolitical tensions and You know at least near term and that doesn't necessarily seem to be making a lot of progress as talks keep breaking down between israel and hamas So if you'd like to follow my work, you can do so on twitter And youtube my name is the same across both mayhem four markets mayhem four markets That's the number four my trading ideas coaching and tools can be found at trader e.com The advanced spx options visualizer that I built for book map is available now You can check that out at trader e.com slash spx and my long-term trading and investment ideas research and consulting services for both high net worth and individuals as well as institutions are available at macro visor dot com I live stream regularly including for book map every tuesday at 9 a.m. Eastern and you can get up to 40 off book map Check the links in this youtube On the book map youtube stream on my own youtube You can find the links there on my profile on twitter if you're watching on twitter You can get up to 40 just hit that link scroll down to the special So now with all that out of the way We're going to dive right into book map as we prepare for the market open And we're going to talk over some of these different markets here And as i'm you know discussing everything here feel free to ask me questions I will be checking around the different streams To see if uh, you know, anyone's popped anything in there that they you know If you want me to look at a stock if you want my opinion on what's going on around the markets or something else You're welcome to ask and you're also Especially encouraged to ask if you see anything on book map that you don't understand that you'd like me to elaborate on Or if you're using book map and you have any questions about how it works There's an amazing team uh over on the book map youtube channel that can always help and they're also on their discord They do a great job supporting their clients. So Here we are on screen. We've got the s and p 500 We are just about five minutes away from the us market open And uh pre market, you know, we've just seen a bit of a bid here Over the last couple of hours or just sort of building into that one of the things we saw this morning was this large level of wrestling liquidity Sellers could not take us through that. They didn't have sufficient supply to push through that 52 45 level So I'd say that's a pretty important level here. We got that bounce It took us above view app the point of control was then dragged higher by buyers and this is where we're positioned As we get ready to open the market right at yesterday's most active call strike in spx translated to yes levels Using my advanced spx options visualizer. That's one of the reasons it's kind of interesting because even the next day you can see these levels Provide some degree of importance. Similarly You can see where resting bids were coming in at yesterday's most active put strike or about 101,000 contracts traded hands Pre market, the nasdaq has a very similar look as the s and p. You had that bid from basically 6 30 a.m on And we've just been grinding higher here, you know, as we get ready to open the market here the the futures for equities look pretty bullish overall And russell similar look as well just had that that did basically from 6 30 a.m on And when we look at rates, well, you know, it's pretty much flat here as we look at the tenure It's a little bit of a reprieve from the selling that we've seen that is we have an overnight bid going into today across the longer end of the yield curve So maybe a little bit of a sigh of relief and equities for that reason And gold gold is very close within striking distance of 24 hundred dollars an ounce I did spot some unusual flow at cme someone put in Spread for the basically a vertical spread targeting 29 hundred dollar gold By december's expiration, right? So they're buying the 29 hundred selling the three thousands to put on that vertical spread That's a pretty big bet on higher prices and gold And happening in well the next eight months or so silver also looking reasonably sprightly this morning trading at 28 25 Up over a percent this morning the rally and silver miners that we caught rather early at trader aid seem set to continue here And copper This is dr. Copper and dr. Copper's diagnosis of the global economy this morning seems pretty optimistic You see this across the metals complex by the way, it's not just gold silver copper It's also platinum and palladium just across the board the metals complex is really well bid Now this is going to pose some challenges to the idea that inflation is under control the genies back in the bottle And everything is going to be just great in that sense But it also means that there are opportunities in different parts of the market Maybe you know in my view it's time to lighten up a little bit on tech and lean more into industrials metals and mining Materials you've got opportunities. Of course in energy as we've discussed I also like utilities here because of increasing power demand and aerospace and defense because geopolitical tensions continue to stay elevated Crude oil down just a little bit pre market here It's about flat really down a little bit from its earlier levels I guess I could say but this is still as we looked at been an incredible performer this year And I think it still may have some room to run In fact, it's starting to build a level of interest with all the auction That's happening back and forth at 86 and change that I think will eventually become a key level of support It was potential resistance earlier and we saw crude back off and then just blast right through it Resistance can come become support Particularly when you see a lot of interest at that level before the next move continuing the primary trend And the euro well the euro is basically up just marginally this morning The dollar is losing a little bit of its gusto again It's in this pattern that looks like consolidation. Maybe it turns into a double top We'll see as time goes on We've got just about uh Less than two minutes before the open so I'm going to take this back to the s&p And then when we open we're going to go through uh the futures again But we're also going to go through some key stocks like the mag seven the semi conductors and of course I'm open to looking at stocks that you're interested in if you want to send me a note Let me know. Hey, I'd like to look at this uh this symbol or this etf You know, we can pop that into bookmark book map and take a look at that And I can also look at the gamma levels and see if there's anything interesting going on there as well And we did get johnson red book earlier I don't think it's a big market mover, but it did show that there's continued Year over year expansion in a nominal level and retail sales when you net out inflation It's not quite as an impressive number if you look at real retail sales But nevertheless it shows that in some areas consumers are continuing to consume All right market is open here We're going to be why we're going to zoom in just a little bit more to the microstructure here now that we have the market open We're going to be focusing on that 20 minute opening range in the nasdaq and the s&p 500 to get a sense as to Whether there is any momentum here to capture if this is a trading day where I'd want to trade it See a lot of buying interest here You could see that these bubbles here are delta their volume delta So the larger the bubble the more aggressive that one side is We've got a 230 million dollar imbalance to the buy side not anything major on the market on open imbalance We do have some degree of elevated passive buying flows as well as a part of The decay of puts as we approach op-ex so that can add a little bit of a bid particularly during the first and last hour But as we saw with skew it is a bit subdued Now we do see liquidity building above us here pretty significantly a lot of that coming on as the market opens But we also see some interesting resting bids below. So we're going to give this a little time again I like watching that 20 minute opening range one thing in the buyer's favor is as we're opening They are pulling the point of control higher here typically that is a bit bullish to see But again, we need to give it just a little bit more time to see how this all plays out Let's take a look at the Nasdaq here also getting a bit of a bid into the open But some of that's being met by sellers absorbing those buyers You can see those larger red dots and we're going to just zoom in a little bit more here Just so we can see that microstructure And the Russell just blasting off almost vertically here on the open that appetite for small caps with their positive momentum Romain's pretty robust Rates just a little bit of a bit on the open nothing too major here gold Seeing a nice move on the open up about five bucks here in the first minute or so of trading Silver continuing its rallying. You've got a decent size resting offer above us You can see this is not a super liquid contract, right? It's about 6.8 Thousand contracts across the bids and offers. So when you see 120 on the offer, it means something, right? Overall has a bullish look to it and copper consolidating here not really following with gold and silver Although this is one to continue keeping an eye on crude continuing to chop sideways here consolidating at that key level Euro getting a bit of a bid, which means the dollars week, which is generally bullish for stocks And we've got semis here. We're just going to zoom into the actual market trading because it's pretty illiquid pre-market And we can see some of these bids and offers starting to stack up on smh. It's just sort of consolidating after the open Apple similar look here. We're going to zoom into this one as well consolidating after the open. You've got that liquidity returning, right? So one of the things you see and this is one of the reasons it's so dangerous to trade pre-market too aggressively Is that You know, there's no liquidity there, right pre-market. There's really nothing going on So you're not as likely to get the kind of fills you want much more likely to get slippage You see this before major events happen as well Like the release of cpi you would see something like this or any kind of event like the fed before their press conference and before their Policy release you see this disappearance of liquidity. So again trading pre-market after market and Into events and during events can be tricky Don't do it if you don't know what you're doing Watch how the liquidity moves before you think about trading this type of stuff Just so you get a better appreciation of risk and if one is to trade that stuff smaller size wider stops are probably the best bet Amazon taking a bit of a slip here falling About a dollar from the open as we see some liquidity building below here at 186 Looks like it may get absorbed here as well. There it goes Google had a nice pop after the open But now oof a little bit of selling pressure coming into it or alphabet whatever we want to call it It'll always be Google to me though Just like meta will always be Facebook to me and meta nice little pop Falling back lower here. We do see that liquidity coming back on the book 520 a pretty major level in the stock Microsoft falling on the open here I'm going to imagine the nasdaq does not look amazing with all these majors falling Nvidia yikes just Down 10 bucks on the open And tesla are another high volatility beast Pretty much consolidating here not seeing that same weakness that we're seeing elsewhere. So let's go take a look at the nasdaq Yeah, boy, you're seeing some selling pressure increasing there with all the majors sort of Giving up the ghost as they were and again We talked about the nasdaq. We talked about the s&p. Remember, there's this key trend line that we're watching And so far i'm just going to put it on screen to remind folks if if I can let's see See if I can Nope, it's not letting me do that right now. So basically there's a key trend line We talked about earlier that the s&p and nasdaq are bumping their heads on They have lost that trend line. Well, the nasdaq a little earlier, but s&p late last week And so I think that still there's a lot of Increase of angst here It's no longer quite as certain who's in control buyers or sellers from an intermediate term basis and that could prompt some Higher levels of realized volatility during the trading day I'm very careful to say volatility itself because I don't want to imply Implied volatility the vix because there's so many vol selling strategies out there that it has not moved the way it should Let's take a look at the s&p 500 Similar look as the nasdaq getting a little bit of a sell here after a nice open overall And microstructure so far starting to look like a bit of a downtrend We have that lower low that lower high But we need another lower low first to really confirm it from that basis And again, we want to see how the first 20 minute opening range really forms here So we've got just about 13 minutes for that Let's take a look at our small cap Index the russell showing some relative resilience here You know versus the nasdaq and the s&p where we're seeing a little weakness the russell continues to be bid Continuing its positive momentum and when we looked at that chart that zoomed out russell chart We can see both of those supportive trend lines are still well intact So it's a little bit easier to go long small caps here simply because long-term intermediate term momentum seems to favor it Let's take a look at rates here. Just sort of chopping sideways. We do have auctions This week today tomorrow And thursday, so it will be important after 1 p.m. To watch those results the biggest thing that I like to watch in these auctions It's the size of the tail if there is one and the comparison Of demand between the two auctions, right? So you can get a sense of that by looking at streams like financial juice has a good one benzinga has a good one A lot of the live squawk services provide this stuff right there on twitter You can look at the last auction You can look at the current auction to get a sense as to how demand may have changed And you can also look at the yield before the auction and the yield high yield during the auction to get a sense as to whether there's a tail A tail is when the high yield in the auction is higher than where the yield was before the auction The greater the difference the bigger the tail the bigger the tail the larger the fail of an auction that is right? So if you get a big enough tail, it's pretty much a nasty auction It usually pushes rates higher on the other side of it If you get the yield the high yield in the auction lower than where it was The before the auction and you have greater demand that can have the opposite effect on rates, right? So it's going to be important You can set up your own internal report card system and really just focus on the you know the bid to cover and the Pre auction yield versus high yield in the auction and you can get a very good sense as to how good of an auction that was It's very easy to do once you get a feel for it Gold continuing to kind of chop here But overall pushing higher from the open and remember this is a very high momentum trade right now Everyone is late on this trade. This is not a crowded trade yet So there's still folks looking to buy into these highs and see further potential upside momentum realized And I think that's part of the reason it continues to move forward the the sheer magnitude and speed of that move Caught a lot of folks off-guard who had very low allocations to gold having watched it chop sideways for so long Silver retreating just a little bit. But like gold still overall looks pretty constructive here, particularly on a longer term chart Copper starting to get a little bit demand here copper Again, this is one of those commodities that I'm bullish of as a part of this re inflation idea That the inflation monster really isn't gone It was just sort of put to sleep for a while and now it's starting to wake up stretch its legs And we can see that in month over month cpi. We can see that in commodity prices We can see that in some of the prices paid in PMIs We can see that in a lot of different areas that there is this firming up There's also a firming up of demand for global goods as manufacturing starts to come out of contraction So that just tells us there could be some legs to this It doesn't mean hyper inflation or anything like that. Don't get me wrong It's more like hey, maybe the commodity trade is back and as a result Maybe looking at energy, industrials metals and mining materials things like that makes sense Crude slipping just a little bit, but again kind of building acceptance above that 86 and change level Let's see how it trades today, but overall this could start to become a pretty important area of support Euro continuing to move higher dollar continuing to move lower with 40 percent of S&P 500 company revenue coming from overseas a weaker dollar is typically beneficial for the index Semi is finally starting to catch a bid here after the open Let's see if we see some improvement in some of these other Heavyweights and we're just going to zoom this out to 930 Yeah, apple starting to look pretty darn constructive here got a lot of resting supply here at 170 Let's see if it's able to take that out amazon after selling off earlier starting to find a bid here But still well off of its pre-market highs Google again, we're just zooming out to get all these on screen google looks pretty good after that slip It came right back up made a new high now. It's consolidating here It did find resistance around 158 where there's about 26 000 on offer So that level could be one to watch Metta seeing a nice bounce just above Um, this large area of resting liquidity when you see those bounces when sellers don't have the supply to take us through those levels That's bullish. Similarly. If it was to be reflected lower here, that would be bearish instead buyers Absorbed this supply overhead. That's a pretty bullish outcome You can see it and that large green bubble as well that supply was consumed It was absorbed and it looks like they're hungry for more 525 is the next level to kind of watch on this thing But nothing really gets my attention until we look at these higher levels like 526 527 in terms of the amount of supply there Microsoft came right back zooming higher. You've got a large resting offer here at 430 about 56 000 on offer there, but let's see if we can get through these higher levels so far It's looking a bit more bullish Remember this thing pulled back earlier right out of the open it pulled back But now we've seen a reversal in that microstructure making a higher low and a higher high So overall microsoft looking pretty good and video also recovering like its peers Bit of a head fake there, right? You can see that the magnitude of that. I'm sure some people got stopped out But it's starting to recover. It doesn't look quite as good as microsoft or some of the others But it's still showing that it's trying to carve out a bottom here And then tesla doing tesla things, right? We see 175 158 000 shares on offer there That's probably going to be a pretty important level, but overall shares look decent above the point of control and view app Going back to the s and p 500 here So someone asks when it comes to options impact on nq Do you pay more attention to options data on triple q or ndx? I pay more attention to triple q because there's a larger amount of premium Changing hands and so the hedging requirements are higher, but I would also say that The nasdaq is a completely different beast Than the s and p futures. There is 1.2 trillion of notional trading in s and p 500 index options every day That is more than pretty much like all the rest of the options market So it's it's pretty nuts, right in that sense like the s and p options really do have a tremendous role Influencing price discovery in triple q. It's nowhere near that magnitude. So I'd say it's important But less so for the nasdaq what I really like to watch Are the options in the heaviest weighted stocks? So looking at microsoft apple nvidia Google amazon tesla those options flows I think give me a little more clarity as to what's going on in the options of And what may influence the nasdaq more than just triple q alone. Let me know if that's helpful All right, so we got a lot of different data traffic coming through enough that it I mean, I do have like 18 symbols open. So sometimes that might get a little bit much Nevertheless s and p not looking quite as good As the nasdaq overall here now, let's zoom out again because again, we're looking for that 20 minute opening range Right, so we want to make sure we keep that Everything from the open on screen, right so we can see like this is the high end of our range. Just about 52 74 50 so far the low end of our range is 52 64 So it's not a very big range right now about 10 points See if that grows as time goes on. We're starting to see the options activity print here too the advanced spx options visualizers seeing enough activity on cboe To start pulling that data in we can see there's more demand Inputs than calls right now and the most aggressive demand is in this hot put which translates to the es level about 52 38 so just keep that in the back of your mind as we zoom back in Yeah, you're very welcome. I'm glad that was helpful The biggest thing with options to take into consideration for everyone that's listening that may not be in tune with like how they work is really Understanding how options activity can impact the underlying right so if I'm a market maker And I'm selling call contracts on nvidia I've got to hedge my delta right what that means is in simple terms I've got to make sure that I have enough exposure to nvidia shares That if I have to pay out those calls, I'm not losing money Right, so you're hedging your delta the delta just gives you an approximate sense as to how much you need to hedge As a market maker like for nvidia if it was a 0.4 delta You're basically hedging 40 shares for every call contract that you're selling now There may be variants and other greeks as to how exactly that plays out But that's the rough back of the nap can take Why does that matter because that's the primary Price discovery mechanism for nvidia right now. It is the most actively traded stock in terms of options out there By far in fact it accounts for about a fifth of all options premium in single stocks right now So it's kind of taken teslas mantle where it was in 2021 So understanding those options flows watching them, especially if you're trading the stocks that they're impacting Can give you a little bit more of a framework of what we might expect from price And we see the s and p here starting to slip We see this large area of resting liquidity right below around 52 60 There were a lot more on offer some of that's been or i'm sorry on bid someone that's been absorbed But we still see about 294 on bid here Now if buyers are absorbed here by sellers that does open us up to some more downside We could see a larger resting offer Coming in right here as well So we're going to be watching some of these key levels will also look for any kind of convergences that we see like with this warm put This is a level of interest that is also shown. There's that convergence with that resting bid This is another reason the advanced spx options visualizer is helpful Because it shows you more than one data point to illustrate the importance of certain levels And then this vol trigger here around 52 50 this lines up with You know where we have enough positioning that if we're to push below it We're going to increase realized intraday volatility because of the way that positioning is going to potentially change how dealers hedge So it's an important enough level that it's automatically marked We're also slipping into negative gamma territory Based on the naive model that we use to make these calculations that gamma flip level was just Pushed under so as we build acceptance below here This does open us up to again more volatility now if you're a trader that's probably music to your ears But if you're not familiar with what this means It means you're likely to see larger price ranges greater expansion Okay of volatility intraday, particularly if we get below that vol trigger So for me as a trader what that means is if we do see that starting to play out if i'm taking a trade I'm using smaller size and wider stops to account for that change in the trading environment So now we're going to zoom out again because now we do have our 20 minute opening range, right? This low right here around 950 Let's call it 52 And this high around 74 50, right? I'm sorry. Look. Yeah, let's call that We're going to zoom in a little bit more to get a better read We'll call it 58 on the low And 74 50 on the high so we are pushing below the bottom of the opening range Now what I like to say is let's build a little acceptance here You know show that sellers really are in control that this isn't just a head fake lower And then I'd say we are prone to have more likelihood of a downtrending day But that opening range being as small as it is suggests that it may not be that wild Now again, what could add to that is if we do start to see Some push, right? We also see some some shifting around and positioning But we do have the midpoint painting on screen What does that tell us the midpoint means that now that we've had a little bit more time to realize how options are trading There's about a 20 percent variance between the top two puts and top two calls total transactional volume Which means that this is a market that's more imbalanced. Okay, if we look at auction theory, I look at three different dimensions to the auction Right, you've got three different kind of outcomes You've got excess supply You've got excess demand and then you've got a balance between the two Those are the three states of an auction for whatever is trading in the market, right? So right now if we're just looking at options We're saying that we're in a market that's in some degree of balance And that midpoint just came on screen within the last several minutes So just important to contextualize that when we're looking at this through the lens of the heat map We see liquidity above fading You can see how much more there was on the heat map when price was closer We see as we slip below this point of control liquidity began to fade as we went below the view app even more And we start to see downside bids growing. So there's more interest in lower price. That's another key area of the auction as well We also saw that warm put level and that hot put level move lower You do see interest in these put buyers in lower prices And these really small bubbles here what you're seeing is there's not a lot of conviction from either side Again kind of speaking to that market imbalance idea No one's taking control of price yet here. This is another reason why I like to see some acceptance built That's kind of what we're doing here below the bottom of the opening range So again, we're favoring more downside, but we're sort of in the process of I would say increasing the probabilities of that outcome as we build acceptance below the bottom of that opening range And as we see liquidity building below and fading above And in terms of where this could go, I would say that 5200 spx is still the most important level to watch That's just around where that hot put is trading as well and in fact the warm put is uh Around yeah, it looks like we do have some shifting of positioning that's starting to happen here So you got a lot of demand at 51 90 5200 and 52 20 on the put side on the call side 52 30 and uh 52 50 in terms of spx levels And I always like to look at unusual flows on both sides of the single stocks and etfs as we've discussed in the past Sometimes they can give us a little bit of a clue if it's lopsided, but you know what we're seeing there We're seeing there the same thing that we're seeing in the advanced spx options visualizer some degree of balance There's a little bit more unusual demand for calls and puts, but it's it's Pretty much a draw So i've got just about four minutes left on the stream if anyone has any questions about anything that i'm showing Please feel free to ask Also, check out my twitter my youtube you can find me on both mayhem four markets. That's mayhem number four markets Check out the description in the youtube if you'd like to take advantage of up to 40 discount discounts on book map You can just scroll down to the specials You can also check out the advanced spx options visualizer on the book map marketplace By visiting trader a dot com slash spx and speaking of trader a that's where we help you find your edge Trading these markets across multiple timeframes and asset classes Check us out for our trade ideas education and community and visit macro visor dot com Where we combine macro momentum to find longer term trading and investment opportunities all around the world And where we're preparing to do a live stream this friday So hope you can join us around 12 p.m Where we look at our quarter two outlook and share our overview of the global markets The macro and our ideas for trading and investing in the second quarter of this year And finally be sure to check out book map. They've got a great discord an awesome community I love the folks there. It's the longest partnership that that i've had with any company in this space It's been fruitful. They've been awesome across the board and it's because I love their product I don't get behind anything I don't use So i'm a little different than some of the folks out there that you might call a quote influencer or whatever I don't you'll see how I you know kind of run my feed. I don't talk about anything that i'm not using I use book map every day So it's one of the few tools that I can get behind and say yeah that one You know, obviously I like other tools out there. There's trading view. There's trend spider There's motive wave those are also great But book map I always keep coming back to them because not only is it insightful for me across a variety of different asset classes But it's also easy for me to build into like when I built the advanced spx options visualizer I just built it for myself at first to help my training Then I shared it with the trader aid community and then after I felt all the bugs were fixed I was like, you know what let's make this thing live for the whole world Everyone could benefit from seeing what institutions typically only see or look at So got just about a minute left here I want to thank you all for tuning in. I'll be back next Tuesday at 9 a.m. Eastern on book map Talking more about what's going on in futures equities currencies and rates A little bit of a boring day in the markets here a bit of a paint drying simulator 2024 replay But maybe things will get a little bit more exciting. We are building acceptance below the bottom of the opening range in the s and p Nasdaq has a similar look here as well Russell is kind of content to ignore everything going on around it. It did sell down But uh, you know, this is still looking pretty bullish comparatively speaking Gold pulling back just a little bit but consolidating its gains And silver pulling back a little bit, but overall just sort of consolidating its gains here Copper continues to look constructive overall especially on the intermediate term crude consolidating at that key level We talked about sort of building acceptance Euro fading a bit coming down off of its high. So dollars showing a little bit more strength here Semiconductor is pulling back and uh, actually making some new lows here. So not not looking too great there on the semis Apple let's zoom out here. Yep showing some strength overall Although if you zoom out on that chart too far, you see it looks pretty precarious Amazon consolidating after those losses just above a key bid Google having decent strength coming back and then retesting those highs taking out that resting offer and consolidating showing some relative strength compared to the overall market and some of its peers meta Metta still looking pretty bad here microstructure suggests further downside in a downtrend Microsoft just sort of consolidating sideways after that sell And everyone's favorite stock Nvidia looks like it just made new lows are very darn close that 862 level 1 to watch and finally We'll round it out with tesla here Tesla looking comparatively better than a lot of the other mag 7 stocks So this has been back to the futures with me markets and mayhem. I hope you enjoyed it I'll be back next week Tuesday at 9 a.m See you then