 Hello, everyone. Welcome to Options with Doug, streaming live daily at 1.30 p.m. Eastern Time on Bookmap Discord and the Bookmap YouTube channel. Before I proceed, 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. As a reminder, the focus of my presentation and the focus of the Options with 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 step is planning and I use positional analysis and I look at how traders and market makers are positioned in the options market and how those positions change from day to day to help develop a thesis regarding volatility and expected trading range for the day as well as the directional bias. And the second step in my process is real time order flow. I look at real time order flow in Bookmap and real time market maker hedging flow and Spot Gamma Hero. And I think this process, combining positional analysis with real time order flow and market maker hedging flow provides a significant edge. Excuse me. And finally, questions and comments are welcome and I will be watching Discord chat, the Options with Doug chat room in Discord as well as YouTube for questions and comments. All right, let's get started. So today I want to talk about, first of all, some news items and that would be economic data, events and earnings and then I want to do a quick, just a brief review of yesterday and talk about what happened yesterday in the S&P 500 and then we'll go over our positional analysis for today and then finally I'll talk about some setups. So first of all, news and today the the news items that came out at 8.30 a.m. Eastern time were the U.S. Durable Goods Orders and the GDP both came in better than expected and then the GDP came in better, again, better than expected but lower than the previous number and all right, so that was the news today and then tomorrow the PCE number comes out at 8.30 a.m. Eastern time and then Michigan Consumer Sentiment at 10 a.m. And I think we're already through past the major earnings for the stocks that I follow. There was Microsoft on Tuesday after the market and then Tesla yesterday and Tesla has been on the move today and then the key events are the FOMC meeting next week and that is the announcement and the press conference are on Wednesday, February 1st. Okay, so the positional analysis of the review of yesterday I want to talk about that quickly. So this is the book map chart for the ES yesterday, the S&P 500 futures and the thing to notice here well first of all yesterday I mentioned that my thesis just based on the data was bullish looking at the for SPX and SPY both the volatility triggers moved up and for SPX both the put wall wall moved up so all that was bullish and also I was looking for higher volatility yesterday because of the changes in the gamma notional becoming more negative. So what happened yesterday was the S&P 500 SPX and SPY reversed higher at the SPX 3950 level and we'll look at a thinkorswim chart in just a minute that may become more clear and then rally so that recall yesterday the Microsoft earnings came out after the close on Tuesday so yesterday initially the move was lower and you know that might have led you to believe that this things have changed but the point here is really to trust the data so price moved down for about the first up until a little bit from 930 up until about a little bit before 11 a.m. maybe 1030 on this chart and reversed higher at the SPX 3950 level that was noted as support and the SPOT gamma a.m. Founders note and moved up to the SPY 400 key gamma strike so the point and for me as well to learn to trust the numbers and the levels not necessarily what you think about earnings or anything else now I know you know I talk about the economic data and that's important but the thing the point here is to trust the numbers and that's the number said again given the increase in the put wall the call wall for SPX the number said bullish and that's what happened reversal at the support level up to the SPY 400 key gamma strike right so that was yesterday and then so let's talk about today now the positional analysis for today so here's today and remember yesterday that SPY 400 key gamma strike was was the high of the day and it was support today and the S&P 500 was there since then heading up to the it looks like the 40-50 level so let's take a look at a bigger picture chart right looking at questions yeah I've talked about my process many times positional analysis and then real-time order flow and real-time market make your hedging flow and I don't necessarily focus on zero DTE options for SPY and I will talk about that just a moment so there is a an impact of traders trading zero DTE options versus longer term there's no build and open interest so I'll talk about that in just a moment so let's go over the levels first so again let's go to a longer term chart and think or swim and this is the 20-day one hour chart so this shows the this is today this darker area and the shaded areas are aftermarket so this is SPX the quick move so the move down to the SPY 400 level and also close to the zero gamma level and then prices reversed higher and heading up to the 40-50 call wall so this is showing it in context and there's yesterday the reversal higher at the 39-50 level again that was noted as support yesterday that's a bigger picture view now let's take a look at another think or swim chart and this is a 2-day 1-minute chart actually it may be 5 days so again here's the reversal yesterday right at the 39-50 level actually 39-49.06 for a $4,000 index that's pretty close the quick jump up now to the 40-50 level today and then the reversal higher at the SPY 400 key gamma strike and also the support level noted in the AM Founders note so there's SPX today and again here's the S&P 500 futures and book map and I'm looking at two columns of levels here this first this is spot gamma cloud notes and these are provided to spot gamma subscribers and they're showing the key gamma levels in terms of SPX numbers that are converted to ES numbers right now gamma is still using a 20-point difference and the difference is closer to 15 actually I calculated a little bit less than 15 points so the levels are a little bit off and I have adjusted my levels in this column this cloud notes column I've adjusted the information that I'm showing to the correct difference so for example this support level was noted at 40-15 and converted to an equivalent ES number that's 40-30 so that is the correct level and then I'm also showing key gamma levels for SPY and that number is pretty close to correct ratio of SPY to ES just about every day so here's the support level also the SPY 400 key gamma strike and the resistance level above so those are the levels in play let's talk about shifts in levels and there really weren't many shifts in levels the volatility trigger for SPY and SPY both shifted down and yesterday SPY's volatility trigger was at 4010 now it's at 3970 and SPY shifted down from 401 to 399 and also the SPY call wall shifted down from 4100 to 4050 and then for QQQ the volatility trigger shifted down and the put wall shifted down so let's take a look at the S&P 500 charts now the absolute gamma level charts so here is SPX absolute gamma levels and what this is showing is market makers gamma and above this line the black bars are showing call gamma or positive gamma and below the zero line the teal bars are showing put gamma or negative gamma so this is the put wall here at 3900 and that's the strike with the largest net negative gamma and that can be expected to act as support and here is the 4000 level gamma strike or the key gamma strike and that's the strike with the largest absolute gamma and that's pretty obvious and then here's the call wall at 4050 and that's the strike with the largest net positive gamma and that can be expected to act as resistance as it did this morning so let's take a look at book map again and we can see that call wall and now that again that should be shifted a little bit lower I do the line at the at the spot gamma level and it should be shifted a little bit lower right near the right near this resistance line so again call wall acted as resistance price went down to the support level and then it's heading back up to resistance so those levels are definitely on play here's spy there's the 390 put wall and you can see the large amount of put gamma there also significant put gamma at 395 then 400 is the absolute gamma strike or key gamma strike and then 410 remains the call wall and that's the strike with the largest net positive gamma so those are the key levels for SPX and spy and let's take a look at the NASDAQ now and for NASDAQ I only look at QQQ I think NDX is not significant okay for QQQ the put wall shifted down to 260 down here and play and the 280 level that's the absolute gamma strike and then here's the call wall here at 295 so a lot of a lot of call gamma above the 280 level and most of the put gamma below and let's take a look at data now that is gamma notional and this shows how market makers are positioned on the gamma curve and all of this shifted higher today so SPX gamma notional is positive so that and this is market makers position again market makers position on the gamma gamma curve and it has it's positive now it was actually 75 yesterday positive 75 and now it is 195 so shifted more positive today and yesterday spy gamma notional was minus 1254 and today it has shifted less negative to minus 728 and yesterday gamma notional for QQQ and that shown on the far right was minus 273 so it has shifted to a fairly neutral minus 24 okay let's take a look at the Vanna charts Vanna model and what this is showing is how market makers delta exposure changes with changes in price and implied volatility and that's shown by the green line so for SPX it's really pretty neutral so this is showing that slightly market makers will have to their delta exposure will increase as price increases and they will have to sell futures to hedge their delta exposure but this is a pretty neutral Vanna model for SPX and for spy we call the gamma notional as minus 728 so it's still negative so just looking at spy market makers delta exposure will increase as price decreases and they will have to sell futures to hedge their delta exposure and then finally QQQ again a very neutral gamma model and also the black line the green line is showing the Vanna effect the change in delta with the change in implied volatility and the black line is showing the change in delta notional at the next expiration as time passes and that's the charm effect okay and next thing I want to take a look at is and I'm looking at all this to develop a thesis for the day so I'm showing this process the things that I look at to develop a thesis again regarding implied volatility and expected range volatility for the day as well as a directional bias and this is these are stocks in my watch list and I track this every day the key gamma strike the KGS key gamma strike and I note the key gamma strike and the current day and then I color code these based on whether the key gamma strike increased or decreased so some increases some decreases not a lot of clarity here really sometimes like on Monday all of these numbers were green and that was a clear bullish signal and here there's not a lot of not a lot of indication of bullish or bearish bias and the last thing that I want to look at and this gets back to the question about zero DTE options and this is talking about yesterday that and there was I'm just taking a little snippet from the spot gamma AM founders note and there was a lot more a broader discussion of this in the AM founders note but I just want to point out again the large volume compared to the changes in open interest was huge so that's indicating that traders were trading a large amount of zero DTE options and not really committing to position so that makes it difficult if you're looking at a positional analysis approach to to developing a thesis that it makes it a little bit more difficult to do that because there's really no you know as I mentioned today there were very little changes in the in the positions and those are based on open interest so this is just indicating that and again recall there was the reversal higher at 3950 SPX 3950 so this is commenting the zero DTE options help to establish the daily low again in SPX 3950 so it stopped early week sellers and created an afternoon chase so this is pointing out also treating price action with a grain of salt until the February 1st FOMC meeting next week so I thought that was an important point and again there was a question in discord about zero DTE options and based on this you would expect to see more of that until traders commit potentially to longer term positions after the FOMC meeting so given all this my thesis for today and again recall the gamma notional became less negative for spy and more positive for SPX my thesis was lower volatility today than yesterday and I had no directional bias really it was just difficult based on this information to develop a directional bias before the market opened okay so let's go over setups and any questions so far no not really let's go over setups let's talk about the S&P 500 first and what this is showing is this is the S&P 500 futures and this is showing a line signal for SPX and spy and this is mostly spy and these are options trades calls and puts again for SPX and spy and spy is the primary instrument traded here if you look at the the numbers the delta is mostly driven by spy trades and we'll look at the spy chart in just a moment so the thing to note here I'm going to zoom in on this a little bit is the divergence here so this is a great short setup notice the dropping hero line and that that was a confirmation here the price increased as hero continued to decrease setting up another short here and then around 11 o'clock is is options traders started taking positive delta positions then SPX reversed higher and again that was around the 400 spy 400 key gamma strike and let's go take a look at spy now just to confirm and pretty much the same thing so let's see what let's get a closer look at and see what traders were doing so we can separate outputs and calls so they were buying puts from the open that's shown by the following blue line and then they started selling calls and then price responded lower all right let's take a look let's go back and take a look at book map again so there's the if you miss this reversal at the call wall then here's that secondary setup short right here and then again the reversal higher at the support level in the 400 key gamma strike so the options market signal good short and long setups in the S&P 500 today and let's go take a look at spy and you see the same thing here and what I've noted here and that's a little bit easier to see order flow here and and spy is all of the trend breaks so right here I'm looking at a looking at a trend break and then a retest of this 403 C2 level that's a combo to level so that's an important gamma level so a trend break retest of that level and a move down to the 401 level and recall 401 yesterday was the volatility trigger and it's moved down to 399 today then a trend break retest of the 401 level move back to the 403 level trend break retest and move down this time this is the test of the 400 key gamma strike and absorption before that level and another trend break test of the forum level and then heading back higher so there's the S&P 500 both short and long entries and there's a question in discord to spot gamma explain how to adjust the levels for ES and no they don't they just do that automatically so I can bring up so it's easy to see what spot gamma provides every day is this little pop up that compares the SPX with ES levels and you can see that they're still using a 20 point difference again even though the difference that I've calculated is about 15 points so they just do this automatically and then the spot gamma cloud notes and book map reflect that so again that's just done automatically but in my seed levels my cloud notes I can put levels wherever I want alright so that's the S&P 500 today and the next thing that I want to take a look at is this is my spot gamma hero watch list and I post this in discord every day and it actually comes in right now the way this new interface for hero comes I have to post it in two separate charts so this is the my watch list ranked from the strongest hero signal to the weakest and what this is showing this hero signal is showing the strength of the current hero signal as compared to the last 30 days and that's shown by the it's hard to see here I know the entire length of this slider it's a light gray and we're looking at the dot here so the dot is on the far right of the last 30 days and it's also above the last 5 days and that's shown by the colored portion there so notice Tesla was at the top of the list and I'm sure everybody's aware that Tesla reported earnings after the close yesterday it was bullish Tesla gapped up quite a bit this morning so not having a not having a thesis for the day really that was my starting point so what I did just went to the top of that list looked at Tesla and let's go look at let's go back to hero now we'll go to Tesla and this is what I saw in the morning and this is pretty rare for Tesla to see such a divergence in hero and price action and I posted a screen shot of this in discord let's see what time I posted that oh about 1023 a little bit after the after the fact I was already in the trade but here's what I'm looking at so traders were pretty much buying calls from the open as price was dropping so there's the hero divergence again this is extremely rare for Tesla usually there's a very strong correlation between hedging flow and price action so there's the setup with hero now let's go take a look at book map again I'm going to zoom in so here's what I was looking at this morning there were really two trend breaks and the first was this larger trend and then the second this smaller trend and notice the here we'll use these notice the absorption here at the 155 liquidity level that's shown so there's the this blue number indicating that that's passive orders absorbing buyers and then these green dots are showing a buy sweep aggressive buyers coming in and notice all the green dots here this is all market buy orders definitely bullish order flow I don't often show this but it was very apparent today just looking at the dots but this rising blue line is showing rising cumulative volume delta so this is definitely bullish and notice increasing as price was falling so that's a CVD divergence so if you missed this entry the next entry was here at the 156 level or even up at the 157 level with a price target at the 160 liquidity here shown here and so there really wasn't as much follow through as I expected let's go back price made it up to 159 and reverse lower did retest of the 155 level and now is heading up and maybe let's check order flow now or hedging flow and it may make it up to the 160 level actually it looks like I need to adjust my price levels to add more above the 160 level so all I did is make a quick change to my spreadsheet here the price line spreadsheet and refresh the levels and that'll add the levels above 160 alright let's go back and take a look at hero take a look at the total signal actually before I do that what this is showing let's go back to calls calls are driving here so first of all we can see that and this is looking at the full one day look back period traders have from about one o'clock to two o'clock stopped buying calls and now they have started again and prices moving higher now I'm going to change the look back period see if we can get more clarity about what's going on in the afternoon and yeah that helps so showing that traders have started to have started to buy calls again and prices responding higher so just a reminder when traders buy calls traders are selling the calls and they have to buy stock to hedge their delta exposure and that's a powerful force that can drive stocks higher so that was why I was so interested in Tesla this morning both the positive order flow as well as the positive hedging flow and there's a question in YouTube do I look at dark pools for spy there's just so much information to look at and it's just not something that I that I look at I'm looking at order flow and hedging flow okay there's Tesla we changed this back so we've looked at two good setups first of all yeah spy there any number of ways to trade that at most with a small range in the more of a trading range type day I think the best trades where they're just trading futures yes futures or spy shares so let's take a quick look at some other setups so again I think those two were the best maybe maybe Nvidia and Moderna also and we'll just take a quick look at some others here's Amazon what I want to point out here is this large block trade let's just see what that was so this is a large this vertical line on the hero signal is a block trade and this is showing a large large institution large order of somebody selling calls and that is bearish and that I think that helps to push price down and notice that was about 1030 so let's go take a look at order flowing book map now take a look at Amazon so there's the reversal lower at 1030 so price makes a lower high here and you know you could have taken the short anywhere around there good for about two points not a lot of liquidity you know I guess at the 99950 level some absorption below that level and then price target at the first price target at the 98 level then 97 so that's Amazon let's take a look at Moderna so a couple things to point out here so in pre-planning if you're planning session looking at Moderna if you were interested in Moderna first of all the note the falling key gamma strike for Moderna and next I'm going to take a look at my hero watch list again and Moderna had a fairly weak hero signal this morning towards the weak side but not as weak as Netflix or QQQ okay and let's go back let's take a look at hero now there's Moderna and that's the final confirmation so I think the most important information there that was the falling key gamma strike list weak hero signal helps to confirm and then there's a strong confirmation with hero and price action let's go take a look at book map again and here Moderna is making a series of lower highs low VWAP and that's this blue line right here and down to the headed toward the 187 liquidity so I'll get short setup there Moderna and let's take a look at take a look at Microsoft now there was a short setup this morning a reversal at the call wall acted as resistance and now it has acted as a a price target and definitely more range day in Microsoft let's see if there's anything in hero and not really more of just a confirmation let's take a look at NVIDIA and much better setup here in NVIDIA today definitely a good short you can see by the strong correlation between the purple hero line and price action let's take a look at book map notice the all the pink dots here we'll take a look at CVD definitely negative order flow negative cumulative volume delta bearish order flow let's zoom in on the morning session that's what I'm looking at notice all the pink dots market sell orders series of lower highs all below VWAP following CVD and note to the reversal at the call wall trend break at the call wall and then price makes a series of lower highs so short setup confirmed by hedging flow and order flow and let's take a look at QQQ QQQ pretty similar to spy short and long setups let's take a look at hero confirming both long and short entries and as usual recently there's a pretty strong correlation between hedging flow and price action confirming both long and short entries and looks like a divergent setup here hero starts rising around 11 a.m. and then price responds just before 11 30 a.m. let's take a look and see what traders were doing so no additional clarity here with puts and calls let's just take a look see what's going on this afternoon change the look back period to 30 minutes so it looks like now traders are we're taking negative delta positions maybe you've switched again negative delta price continues to rise let's go take a look at Tesla again still strong hedging flow zoom in looks like it may be dipping down a little bit changed to 30 minutes rising again let's go back to book map actually let's just separate outputs and calls so traders are buying calls started about 2 p.m. look at book map back at Tesla looks like CVD see all the pink dots there have shifted negative may not be able to make it up to the 160 level again let me check for final questions and that's pretty much all that I had today so again just based on the information that I had the opening not able to develop much of a thesis regarding a directional bias so I waited until the open watch watch my hero watch list saw Tesla at the top of the list and that was a good good quick long setup this morning and then also the S&P 500 responding to levels as expected both the 400 spy 400 key image strike as well as the 4050 SPX call wall alright and let me check for questions and YouTube and would you say the best setups happen when all converge and yes so my setups definitely are when I have the more when I have more indications or confirmations of a setup they're typically more reliable so for a short key gamma strike shifted down from prior day hero scan has red dot hero chart indicates put buying and call selling and I think for a stock yeah that would be a definite confirmation the only additional thing I would look for as first of all levels on my book map chart I would look at key gamma levels to see whether they're in play and if I'm looking for a reversal I have more confidence if let's say a reversal down occurs at a call wall or a reversal higher occurs at a put wall and also liquidity levels and looking at those levels for absorption and targets so yes I'm looking for as many confirmations as possible for a setup so again to answer your question anything more to add for confirmation that's just the levels key gamma levels on your chart as well as liquidity and book map alright that is all that I had I don't see any more questions so I'm going to wrap it up and I want to thank everyone for watching thanks for your questions and comments and I will see you tomorrow thanks again bye