 Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 PM Eastern Time. Before I go any further, 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, creating 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. As a reminder, the focus of my presentation and the focus of the Options with Doug chat 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 and I look at how traders and market makers are positioned in the options market to help develop a thesis for the day regarding expected trading range and volatility as well as the directional bias and the second step in my process is execution and I look at real time order flow in Bookmap and real time market maker hedging flow with Spot Gamma Hero to confirm my thesis and for entries and exits and I think this process provides a significant edge. A positional analysis is a new way of looking at the market again. I think it provides a significant edge and questions and comments are welcome. I will be watching the chat and Discord as well as the chat and YouTube. So again, questions and comments are welcome and what I wanna talk about today, first go over some news items, economic data that came out this morning and upcoming events, then we'll go through our positional analysis and finally talk about setups. So first of all, in the news this morning, the final set of economic data came out this morning and at 8.30 PCE and the consumer spending both came at around forecast. So PCE was 5% in forecast for 5% and less than previous and that was at 8.30 a.m. Eastern Time and then at 10 a.m., the University of Michigan Consumer Sentiment came out just a little bit better than forecast. So that was the final data, final economic event for the week and then next week upcoming and I'll talk more about this on Monday but I have mentioned all week that upcoming FOMC meeting on Wednesday and that is Wednesday, February 1st and that is the first FOMC meeting of the year and then there are other economic data drops next week. I think the primary one will be the employment situation on Friday. Okay, so let's take a look now at our positional analysis. Sorry, moving around a little bit. All right, so positional analysis and I like to start with a little bit larger timeframe and this is an SPX chart in Thinkorswim and it is a 20-day one-hour chart and I've zoomed in a bit to just the last few days. The end of last week and then this week. So this is showing, again, SPX levels. These are spot gamma levels and these are current for today. So this is showing the football, the 3,900 level which has been a significant level and that's showing that price reversed higher around the 3,900 level last week, rallied up above the 40-20 level, which is currently the volatility trigger, went down and tested the 4,000 level and then on Wednesday, SPX dropped down and I drew this line in myself. The 3,950 is no longer based on today's levels, no longer a key gamma level but anyway, it's still the SPX round number 3,950 and on Wednesday, SPX dapped down, tested that level almost to the tick and then it has rallied ever since then and yesterday went down and tested just a little bit below this 40-20 level and then it has continued to rally higher and notice today, SPX opened up, quickly tested the 40-50 level and then it's continuing to rally and it looks like the next target above is the call wall, the 4,100 level. So that is the bigger picture looking at the SPX and that's the primary S&P 500 index and everything else is a derivative of that including the ES future. So these levels are very important to keep track of. All right, so that's a bigger picture level. Let's zoom in a bit and I'm gonna go to another thinkorswim chart. This is a two-day one-minute chart. Actually, I think it may be a five-day one-minute chart. So this is going back to Wednesday, showing the reversal higher at 3950 then yesterday, the test of the 40-20, 40-15 level and then today in the dark, this dark area, this is the RTH, regular trading hours, the test of the 40-50 level, which is a combo L2 level and then a retest of that level after reversing lower at this combo L5 level at, it looks like at 4075. And we'll check that a little bit. We'll take a look at book map and see where that level is and actually hold on, let me see. We can take a look at this pop-up. So it's actually at 4076, that combo L5 level that acted as resistance before and now prices, again, moving higher and the next primary target is the 4100 call wall and one thing to note, Spot Gamma does not consider the S&P 500 or any instrument overbought until it's above its call wall. Okay, so that is the, excuse me, that is the, those are the levels for SPX. Now let's take a look at book map. Go to the S&P 500. So one thing to note is, let me bring this pop-up back. Spot Gamma has changed the difference between the ES and SPX to 15 points now. So I sent them an email yesterday to support and they adjusted this and it's, they were using 20 points yesterday and that was too wide. So right now it's closer to the actual difference at 14, 15 points. So these levels that I'm showing on the chart should be more accurate. What I have here, these are Spot Gamma cloud notes and these cloud notes have been adjusted to that 15 point difference. So this is showing combo levels which combine SPI and SPX levels and also SPX levels. So this is a combo again, SPX SPI combo and then this is just an SPX level. So there's the 40, 50 that has definitely been in play today. So I've noted again the levels of play here, the 40, 50 down below and this combo L5 level, the 40, 76 above. So those are the Spot Gamma cloud notes. Those are updated automatically every day and then this is my column. These, excuse me, these cloud notes, this is my column of cloud notes and what I'm showing is the support and resistance levels that are noted in the AM Founders Note, Spot Gamma, AM Founders Note. This is the upper edge of the expected move. So the SPX, like many other instruments this week is trading above the upper edge of the expected move and that is, that's just based on the options market, the one standard deviation move. This is for the week. So that changes at the end of every week and I marked that on my charts. So those are the levels in play, right? Let me check for questions. All right, so there's a question about the combo L2 level tag. It's not automatically synchronized in Thinkorswim and the way that works is Spot Gamma provides for their subscribers notes to add to your charts for a variety of different trading platforms and here I've shown the Spot Gamma cloud notes for Bookmap, that's automatic and for Thinkorswim it's not. You have to go in and I showed how to do this, I think on Monday, so go back and look at the archives but you have to open up the, it's a text file, open it up, copy the script and then go into Thinkorswim and paste that in there, give the script a name and you have to update it every day and ancient the architect as you prefer trading futures or options, ES or SPI and that's a personal preference. So my personal preference may not be the same as somebody else so I prefer to trade SPI and one of the reasons is I get an email every couple of months about CME raising their fees and I can trade SPI with free, no commissions, very minimal exchange fees and I prefer trading options as well so I prefer SPI and options over ES, just I prefer trading stocks generally so I have Bookmap open, I have Thinkorswim open and I have really a choice of either my stock trading platform or my futures trading platform since I like to trade stocks, I like to trade NVIDIA and Tesla so I just keep my stock trading platform open and trade SPI if I wanna trade the S&P 500 and there's another question, what are the green and red numbers on the bottom and top of the Bookmap chart and I'm not sure, oh the, are you talking about like that number right there, the 247, if that is the question, that is a, those are showing by stops so that is only for futures and that is showing the, that's the on chart stops indicator and those are showing stop orders and then I also, so I have the stops and icebergs, sub chart and on chart indicators so that little green 247, that's showing by stops and you can see that that corresponds to this rising line, the yellow line and the sub chart showing essentially a lot of this move up was fueled by stops as well as this rising dark blue line that's cumulative volume delta, those are aggressive by orders, okay and there's a question, what are the different large gamma, one, two, three, four and combo levels so one indicates the highest level of gamma so that's the most important level and the range is one through five and five would be the least important level so Sam Pan, if you do have a spot gamma subscription take, watch the, go to the blog, watch the videos, the subscriber Q and A videos, read through the support center and you should find most of the answers to your questions yeah, just go to their YouTube channel as well so it takes time to absorb all that and there's a, okay so 4DDrover asks with triangles there are no, I'm not sure I see any triangles that would, if you're seeing triangles you're maybe looking at an older chart that was part of the older book map hero, those triangles are no longer available that is the old book map hero, again that's no longer available and the buy sell stops printed out on book map does it mean they executed, yes there's no way of knowing that there was a stop order there until it's after it's executed and that is part of the MBO bundle, market buy order bundle in the book map marketplace and it applies for icebergs as well, yes so that is the stops and icebergs so we're kind of getting off topic here so let's stick to, book map has tons of videos as well about stops and icebergs and all sorts of features of book map so the things that I'm using here just a last quick note for futures I'm just using stops and icebergs on chart and stops and icebergs sub chart and sub chart of the lines below and the stops and icebergs are the numbers on the charts so again I'll refer you to refer you to the book map YouTube channel and knowledge base for more information about that all right so let's go on with our positional analysis so I've talked about the levels in play today and then let's talk about shifts and levels and first of all the volatility trigger shifted higher across the board, SPX, SPY, NDX and QQQ so that is, that's bullish and then for SPX, the call wall shifted higher to 4100 yesterday it was 4050 and for QQQ, again the volatility shifted higher and the put wall shifted higher and the key gamma strike shifted higher so again that's bullish all right let's take a look at the S&P 500 charts now look at the absolute gamma levels so this is for SPX, there's 3,900 put wall and that was in play earlier this week and there's the 4,000 level that's been in play as well and then note the build and call gamma above here and we'll look at SPY and see pretty much the same thing so and here's the 4,100 level and now that is the call wall that's the strike with the largest net positive gamma and can be expected to act as resistance and again the way the SPOT gamma looks at this is a marketer's not overbought until it is trading above its call wall so again the thing to note here is the build of positive gamma so just to forgot to say this so what I'm looking at this is the zero line here and above I'm looking at positive gamma or a call gamma and below that's the black lines and below that the teal lines are showing put gamma or negative gamma let's take a look at SPY now and for SPY, there's the 390 put wall and that's the strike with the largest net negative gamma and that can be expected to act as support and there's the 400 key gamma strike or absolute gamma strike and that's the strike with the largest absolute gamma and just like the 4,000 level in SPX and then there's the 410 call wall again the strike with the largest net positive gamma and again note that the build of positive gamma here so there are a couple ways of looking at that when it's certainly bullish that call positions are building up above but remember that SPOT gamma assumes that traders are short calls, market makers are long calls and this means that up in this region of the gamma curve they have to sell futures to hedge their delta exposure so as price increases, their calls tend to increase they wanna remain delta neutral so they have to sell futures to hedge their delta exposure so that tends to reduce volatility and can act as resistance and then let's take a look at the oh, one other thing that I wanted to take a look at this is the SPI so SPOT gamma provides these pop-up charts for I look at SPX, SPI and QQQ and one thing to note and I use this to fill out my spreadsheet that I use for that C levels column for all my stocks for futures as well as all my stocks and I can just track this remember what I'm doing every day and the thing to note here is the build of all these positions above 400 so a few days ago I was filling in levels below 400 and now that has shifted to all these levels above 400 so this is the information, the basic raw data for my spreadsheet and I add all these levels we'll take a look at my SPI chart in a minute to see that all right, let's take a look at the NASDAQ now and these are the absolute gamma levels for QQQ again, the zero line above is positive gamma and below the teal bars are showing negative gamma or put gamma and here's the put wall at 270 and then 295 is the strike with the largest net positive gamma as well as the largest absolute gamma so it is the call wall and the key gamma strike all right, let's take a look at data now and this is the spot gamma AM founders note and the thing to point out first is gamma notional so this has become even more positive for SPX that's this left column so gamma notional increased or became in the case of SPI less negative for all of these for SPX on the left yesterday SPX gamma notional was 195 today it's 431 so this is market makers position on the gamma curve and again this is firmly in the positive region for SPX meaning that market makers have to sell futures to hedge their delta exposures price increases and that tends to reduce volatility and for SPI yesterday gamma notional was minus 728 and today it's minus 153 so that's very neutral for SPI and I'm just looking back at my notes so a couple of days ago SPI gamma notional was minus 1254 and today it is minus 153 so has become again close to neutral and then for QQQ gamma notional is also positive and yesterday it was minus 24 and today it's 105 so again pretty neutral for SPI and then in the positive gamma region for SPX and QQQ indicating that market we're in the region of the gamma curve where market makers are long calls and they have to sell futures to hedge their delta exposures price increases all right one other thing that I look at every day I don't often point it out but this call put gamma tilt and what this is this is the I hope everybody can see this pop up the CP gamma tilt is the ratio of total call gamma to total put gamma and this is pretty similar to a put call ratio but it's gamma weighted and this indicates a shift I can't indicate a shift in trader sentiment and I track this every day and these numbers have been increasing for the last pretty much all week have been increasing becoming more and more bullish as traders add call positions so another bullish sign there let's take a quick look at the Vana models this is for SPX and this is a visual representation of what I was talking about and remember how for most of this year it was skewed the other way rising from right to left and now gamma notional is rising from left to right again just showing that market makers delta notional or delta exposure increases as price increases so they have to sell futures and the green line shows the Vana effect and that shows how their delta notional delta exposure will change with changes in applied volatility and then the black line shows how their delta notional changes as time passes and that is the charm effect the change in delta as time passes change in time so that's SPX slightly still shifted to the left rising from right to left for spy but overall this is pretty neutral I would draw a line through this just very slightly tilted and compare to what it has been for most of these this year and last year very neutral for spy and then also pretty neutral for QQQ so that's the Vana models and also I want to take a look at equity hub look at SPX and point out a couple things here what this chart takes some practice to take a look at but it can provide valuable information first of all the green area indicates an area of call dominance or positive gamma and the red indicates an area of put dominance or negative gamma and right now it's showing that shift line at 39.75 according to this chart and then this on the vertical axis that's the momentum indicator indicating the momentum of change in gamma and you can also equate that to volatility for the instrument and one thing to note is these inflection points here so this point right here 40.65 that was noted as a resistance level so that's the SPX 40.65 level and notice as price drops there's a pretty significant shift higher in this momentum indicator up to the 40.45 level so as price drops from that resistance again this was noted as the higher resistance level this morning this 40.65 and as price drops note the increase in volatility as the as this SD momentum indicator increases up to this highest level at around 40.30 so just an interesting note there and then finally so again I'm doing all of this talking about what I look at in my prep for the morning my positional analysis and then finally point out the this spreadsheet that I keep every day and I note the current key gamma strike in the previous key gamma strike so the previous key gamma strike for all the stocks in my watch list is in this left column this is from yesterday and this is from today and I note the changes in the key gamma strike by color coding them green means it increased and red means it decreased so a couple things to note here is the pretty significant shift higher in QQQ shift higher in Tesla Tesla has just been on a tear okay so looking at all of this looking at this data the shifts higher in the levels the volatility triggers the SPX call wall the QQQ put wall and key gamma strike and then the key gamma strike for these stocks my bias was bullish and I was not looking for as high a volatility wide trading range as yesterday due to the drop in gamma notional and the S&P 500 especially coming up on resistance at the 4050 to 4100 level due to all that positive gamma above and knowing that market makers would need to be selling futures and at that level so that's my thesis for today was again bullish looking for a not as wide a trading range as yesterday alright so let's take a look at some setups now so let's start with the ES I'm going to go to hero and I did post my I did post my spot gamma hero watch list and discord this morning and for those of you who are not discord you should join it's free and open to all but let's I'll just I'll bring this up so everybody can see it so again given my bullish bias for the day this is a good starting point looking at this you know 10 15 minutes after the open and then ranking all the instruments in my watch list with this hero signal and what this is showing is the strength of the hero signal and the last 30 days and last five days and this dot is the current signal and so this I know it's probably impossible to see but there is a slightly gray slider here and that's showing the range for 30 days and then the colored portion is showing the range for the last five days so the hero signal for the S&P 500 ES as well as spy was higher that it's been a last 30 days and the last five days so that was a good place to start so we'll look at ES and we'll look at spy and I'm going to zoom in on the the morning session here and there was a strong confirmation bullish confirmation from the open and remember that reversal higher at the 4050 level as traders were see what they were doing primarily buying calls total signal gives a little bit more clarity then they start taking negative delta positions price dips down a little bit and then they start taking positive delta positions that's shown by the rising blue line and that provides a good good buying opportunity around ten a.m. just as the data came out and then there was a divergence lower and provide price reversed again at the let's go back and take a look at bookmark now make sure that I have that level right so price reversed so after that look at spot cam again so that's a ten so there's the reversal at that combo level the o five combo level after that quick move higher just after the ten a.m. data we can zoom in on this so that makes it a little bit more clear so remember there's that dip in the hero line just as just before the data the data came out and price moved up to this forty seventy six level and then traders started taking negative delta positions again let's go back and take a look at hero now and I know it's hard to jump from one chart to another uh... I have two monitors so I'm watching hero on one screen and book map on another screen so here's that slight divergence reversal lower back down to that forty fifty level and then traders started taking positive delta positions again and price increases so options trades and this is uh... again e s e s e five hundred futures showing options trades for s p x and spy and it's primarily spy so i'm gonna zoom all the way out see what's going on now go back to a shorter look back period it looks like they're still taking positive delta positions it's showing a one-day look back period so it's showing the cumulative uh... a fact of all these options trades for the entire day go back and look at book map one more time go back to the full day so there's that reversal higher again at the forty fifty level and prices gone higher back up to the forty seventy six level take a look at spy now so there's the move higher in the morning reversal lower and then the move back up heading toward the four oh seven level right let me check for questions and there's a question about nvidia nvidia the key gamma strike increased implying bullish yes uh... but hero chart was bearish but stock went up and we'll take a look at nvidia and that was a uh... and that was a uh... a real short thing it didn't last long so i posted the uh... what what again we'll take a look at nvidia that was a uh... what look like a potential reversal at the call wall and it turned out to be a head fake and san pan asked how do you come up with the spy four four seven let's we're looking at spy so this is just a you know this is actually this is actually spy four oh seven i just have this these c levels provide me with a visual a quick visual reference of the of this level so instead of looking at one you know one list of great numbers i can see the brown numbers and these are just what i mark in my c-levels charts so four four just round numbers and spy that's all i'm showing and there's four four four seven i just make it easier to look at no it's not from spot yeah it's just the actual level you know it's four oh seven this is a book map this is you can look at a you know just look at a candlestick chart any chart you want to there's no magic here it's just what it is now the you know the only thing that i'm doing here with spy is i am remember i showed this i showed this pop up for spy so what i'm doing is marking all these levels in a spreadsheet so there for example is the four oh five lg two level and i just use a different color for the line the text and the the note and i'm way behind here alright so that's that's the smp five hundred strong today and the positional analysis indicated that that would be the case although you know it looks like the smp five hundred is getting up into that positive gamma region and could could meet resistance right the next to tesla that was at the top of the list just under yes and just another crazy bullish day in tesla it looks like i need to add more levels in my spreadsheet give me just a moment so i stopped at one eighty and that's not enough so i'm going to price lines refresh the levels i just updated my spreadsheet and that should just take a moment to fill in and while we're waiting on that let's take a look at hero so we're gonna go to tesla now and i've sorted these in the alphabetical order now and traders continue to buy calls let's take a look we'll go back to a shorter look back period here and looks like there's a kind of a lunchtime dip lunch lunchtime wall and then traders are taking positive delta positions again heading up to that one eighty level and the reason i changed the change the look back period let's go back and take a look entire day and when i see hero flatline like this especially in the afternoon i want to take a look this is the cumulative cumulative delta and dollar terms the entire day so it's accumulating all of this all these trades from earlier and if you change the look back period down to a shorter time period it's changing that rolling window from i change it from one day to thirty minutes so there's tesla let's go back and take a look at book map now so now that one eighty one is filled in and tesla generally provides pretty good pullback opportunities all along the way and note that tesla is trading well well above its call wall and that would at these levels for me it would be difficult to get long but still traders are taking tesla higher right qqq strong day in qqq now trading above the two ninety five call wall bullish order flow notice all the green dots market buy orders let's take a look at cvd here not much clarity there order flow is definitely bullish trading above the the call wall take a look at a hero there's confirmation am confirmation of a move higher then divergence lower for just a small pullback and then confirmation higher okay let me check for questions it was a question discord how do i know to stay in when hero turns back down uh... on s p x let's take a look now i i generally don't look at hero for s p x if i'm looking at the s and p five hundred i'm gonna look at yes or really primarily spy so this is the spy is what's dominating spy options trade is really what's dominating verses s p x so i look at spy so if i see spy uh... hero turning down for example so again i'm looking at two charts i'm looking at here on one chart and book map on another chart so let's go take so i'm looking at this chart for example i see hero turning down this is the uh... one-day look back period let's change it to thirty minutes and this shows that here was trending down now it's trending higher and price now has responded higher so you know right now i would still uh... be bullish for s and p five hundred so if i see uh... answer your question so if i see how do i know to stay in when hero turns back down to as uh... on s p x s and p five hundred i would be looking for a reversal point so i'm looking at hero and book map for uh... order flow so i would want to confirm what i see in hero with order flow before i make any decisions so if i see hero falling price continues to rise i would look for a reversal point and you know i've talked about those levels in uh... especially on the e s chart of the s s p x levels and i would look for order flow to confirm a reversal at one of those levels and put it you know potentially look at one of those levels for a target and a reversal point so let's just take a look at example of that and we'll look at uh... in video after that and then wrap it up with that i'm a change this back to the one-day look look back period the spy let's take a look at the s we may get a little bit more clarity that's what i was looking at before it's a little bit more clear so looking at this and hero making lower highs so remember this is about between ten and ten fifteen so let's say i see hero dropping coming up making a lower high the e s continues to rise so let's go back and look at book map and again we're looking for a reversal about about ten fifteen and there it is at this combo l five level will zoom in on this we looked at this earlier so there so let me check lbs studio this is what i'm using for so it looks okay this is what i'm using for youtube okay looks okay there's the first dip down notice the bullish order flow here all these green dots coming in and the next point that i'm going to look for a reversal and a potential target if i'm long is this combo well five level and then the liquidity above so i would stay in as long as the order flows bullish it certainly was and i see stops continuing to rise cumulative volume delt continuing to rise and again all the green dots coming in right at ten a.m. at the data wrap it up we'll take a look at and it has just been crazy strong this week just like tesla so what i was looking at this morning and again no two hundred is the call wall and now and video is trading above two hundred so here's this morning and this is what i was looking at and it certainly didn't last long and let me i posted this in and discord so there's the there's the two hundred call wall key delta strike and key gamma strike and i saw that as price was approaching that level trader started selling calls and buying puts so that it looked like a potential reversal at the call wall let's go back and take a look at book and did not last very long here it is right here nothing there just another buying opportunity and i posted i'll bring up the next screenshot that i posted just another buying opportunity you know hero just quickly shifted five minutes later from negative delta to positive delta and price continued higher again just another buying opportunity let's take a look at hero now for nvidia strong positive delta hedging flow all day traders of buying calls shown by the rising orange line okay that's nvidia and i missed a question in youtube we're very close to the spx call wall do you think is going to break it and how do you analyze close to these areas so really i'll wait till spx gets there so let's just take a look at spx chart again so spx now is at forty eighty four forty eighty five not at the call wall yet so typically in uh... indices spx spy e s qqq well i i'd say especially sdp five hundred i respect their call wall levels uh... more than stocks you know we've seen that both nvidia and tesla are trading well above their call walls uh... netflix is another stock that doesn't have any respect for it said it's not very liquid that you know certainly not as liquid is nvidia tesla or not even close to the liquidity of the sdp five hundred really has very little respect for uh... the call wall level for example you know traders wanted netflix higher they're going to take it higher so anyway uh... again like i mentioned before i'm looking at order flow in book map and hedging flow to make and the decisions uh... and the levels book map in this chart to make decisions so interesting day today as usual a pretty big shift from last year just crazy bullish week so anyway that's all i had i don't see any more questions so i'm gonna wrap it up for today thank you everyone for watching thanks for your questions and comments i hope and i answered everything and have a great weekend and i will see you on monday thanks again