 Hello, everyone. Welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30 p.m. Eastern time. Before I get started, I need to go through the disclosures. 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 involve 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 expected range, trading range, and volatility for the day as well as a directional bias. And the second step of my process is execution and I look at real-time order flow and Bookmap and real-time market maker hedging flow and hero, spot gamma hero to confirm my thesis and for setups for entries and exits. And I think this is a new way of looking at the market. A lot of traders use technical analysis or fundamental analysis and again, I think this is a new way of looking at the market that can provide a significant edge. And questions and comments are welcome and I will be watching the Options with Doug chat channel and Discord as well as the chat and YouTube for questions and comments. So again, your questions and comments are welcome. All right let's get started and what I want to talk about today first some news items. Economic data, key events and earnings and we've got a jam-packed week this week of earnings, events, and economic data and then after that we'll go through our transitional analysis and then after that talk about some setups. All right so first economic data and this is an economic calendar for the week and there's one key event at the end of the week and I'm just going to point out quickly some of these events that are highlighted in red just quickly here. First of all, consumer confidence tomorrow 10 a.m. PMI data on Friday morning and of course the FOMC meeting starts on Tuesday and then concludes on Wednesday with the announcement at 2 p.m. and then the press conference at 2.30 p.m. So that's the first really big key event for the week and then the next is the employment situation report on Friday morning at 8.30 a.m. Eastern time and so regarding the FOMC meeting and announcement let's take a couple, look at a couple things here. First this is the CME Fed watch tool and this is showing the expectation for the next meeting and first of all this is the current target rate right here 425 to 450 basis points that range and then the expectation is here about 99% confident of a 25 point basis point rate hike so this is what the market is looking for and notice a month ago there was about a two-thirds chance of this 25 basis point hike and a one-third chance of a 50 basis point hike and now that has shifted to almost 100% confidence in a 25 basis point rate hike so that is what the market is looking for and another interesting thing and this is from the Spot Gamma A.M. Founder's note and pointing out the very low volatility this is the volatility term structure for the SPX and this is showing, comparing the SPX implied volatility at the last number, CPI report and FOMC report that's in red and notice the contrast to the current implied volatility huge difference this is somewhat unusual and I posted this a chart of VIX in the bookmap discord last week showing that VIX is at a about a one-year low so very low volatility going into this meeting it looks like market participants are highly confident of this 25 point basis point 25 point basis point hike and that's what they're looking for what they expect and what they're accepting and then finally this week earnings this is a big week for tech earnings the stocks on my watch list and first of all, A.M.D. reports tomorrow and I think these are all after the market close so A.M.D. tomorrow that's on Tuesday Metta on Wednesday and then Thursday is the big day with Apple, Amazon and Google reporting after the close on Thursday so again, a big week a lot of events a lot of news items FOMC meeting FOM employment situation report and earnings okay, so that takes care of that let's take a look at our positional analysis now and I'm going to start start with the ES futures the S&P 500 futures and the key levels are shown on the chart here what I'm showing I have two columns of levels and the first, this is spot gamma cloud notes these are provided to spot gamma subscribers they're updated automatically and they're showing key levels for SPX and sometimes combo levels spy and SPX combo levels and this is showing the 40-50 level for example and this is showing the zero gamma level and that is a level of zero gamma market makers position would be zero gamma at that point so both of these levels have definitely been in play today and I've marked some of these excuse me marked some of these so you can see here that this 40-50 level has been very important this morning and one thing to note, I think these levels are are pretty accurate spot gamma is using a 50-15 15-15 point difference between SPX and ES and that seems to be about right today so this 40-50 level has definitely been in play as well as the zero gamma level which is at SPX 40-31 and we'll take a look at at hero in a minute spot gamma hero and see what options traders were doing as price approached these levels alright let's we'll step back and take a look at a a larger time frame chart so this is a think or swim and using the the notes that spot gamma provides in a script that has to you have to manually update it every day but that's what I'm showing on this chart so these are the current SPX key gamma levels and this is showing that and I posted this on on Friday in discord as well this rise up almost 150 points from the 39-50 level all the way up just below the 40-100 level that was last week and then SPX gap lower and has traded again around the 40-50 level and now is around the zero gamma level and the volatility volatility trigger is just below that and that is a spot gamma proprietary level that's the gamma flip level where gamma flips from positive above to negative below and that's the market makers position on the gamma curve so that is a again a one hour chart just get a bigger picture view and let's take a look now at this is just SPX this is a one minute chart and again showing all the interaction mostly resistance at that 40-50 level and then support at the zero gamma level and then price seems to be breaking below that now so those are the levels on the charts and again we'll look at hero in a minute and see how options traders were reacting as price approach those levels alright shifts in levels for the SPX very few and this is something that I look at to help develop a thesis for the day especially regarding directional bias so for the S&P 500 the spy volatility trigger increased just slightly from 400 to 404 and that's it and for SPX the put wall shifted down from 3900 to 3800 and that's it for the S&P 500 and it's a different story for QQQ the volatility trigger put wall call wall and key gamma strike all shifted higher so that's very bullish for QQQ to see all those shifts higher in levels and let's go take a look now at the S&P 500 gamma levels so here is the again these are absolute gamma levels what this is showing is positive gamma above the zero line that's in black bars and negative gamma or put gamma below the zero line those are the teal bars and this is just showing the still the dominance of the SPX 4000 strike and now 3800 is the put wall not really in play today but that is the strike with the largest negative gamma and again 4000 that's very obvious as the strike with the largest absolute gamma so that's the absolute gamma strike and then here's the call wall at 4100 so that is SPX here's spy and 390 that's the put wall 400 the key gamma strike or the absolute gamma strike and then 410 is the call wall and that's the strike with the largest net positive gamma so the put wall can be expected to act as support and the call wall expected to act as resistance let's take a look now at QQQ just looking at spy here positive still a lot of put gamma below this 400 level and call gamma above and spy is still in a in a negative gamma the market makers position and spy on the spy gamma curve is still negative just slightly negative and positive for SPX and let's take a look at NASDAQ now so this is QQQ 280 the put wall strike with the largest net negative gamma and now the 300 strike is the call wall and the key gamma strike let's just take a look in equity hub take a look at QQQ still put dominated and the thing that I'm looking at here is the five day history there's the rising key gamma strike the rising hedge wall or volatility trigger so for QQQ it's actually a volatility trigger and the rising call wall and the rising put wall so just looking at this this is very bullish alright let's take a look data now so think that I want to look at is gamma notional and we'll look at SPX on the left here and that's gamma notional for this morning and I compare morning to morning so I'm going to compare the number Friday morning the gamma notional from Friday morning to this morning and this is market makers position on the gamma curve and it's positive for SPX so that means that market makers are in the positive gamma or call gamma region of the curve and they will be trading against price to hedge their delta exposure so as price increases they will need to sell futures to hedge their delta exposure and as price drops they will need to buy futures to hedge their delta exposure and it's just slightly the opposite with SPY so on Friday gamma notional for SPY was minus 153 today it's minus 250 so both have gone SPX gone lower just a little bit more less positive and then SPY is a little bit more negative so again SPY is shifted from minus 153 to minus 150 and then for QQQ it's 0 so this is not indicating that there's going to be a for the indices SPX SPY QQQ not implying a lot of movement so my take away from this is a lower volatility, lower trading range today and let's take a look at the Vana charts and this is a these are simple charts that confirm that information so this is SPX this shows market makers delta exposure delta notional and how it changes with changes in price that's shown on the horizontal axis and changes in implied volatility and that's shown by the green line and that's the Vana effect Vana is a second order Greek that indicates the change in delta with a change in implied volatility so there's SPX again indicating market makers delta notional will increase as price increases and they'll have to sell futures to hedge their delta exposure and just the opposite with SPY market makers delta notional increases as price decreases and then totally neutral for QQQ so again all of this when you combine SPX SPY for the S&P 500 I take that as somewhat neutral as well as QQQ somewhat neutral and then finally I want to take a look at my and thank you to thanks to Spot Gamma for this chart and then finally this is my key gamma strike red sheet and I keep track of this every day and I track the key gamma strike for all the stocks on my watch list for the current day and the previous day those are shown in the right two right columns and then I color code the number green if it increased or red if it decreased so this is somewhat bullish not not outstandingly bullish and one other thing that I want to point out so all together so my thesis for the day for S&P 500 I really didn't have a directional bias I was just looking at watching hero and seeing how price reacted at the key gamma levels and it certainly did those SPX levels on the ES chart as well as I now put them on my spy chart was extremely helpful and I'll show that a little bit more closely alright so one other thing that I want to point out is last week how bullish it was so this is maybe a little bit hard to see this is a thinker swim chart and what I'm showing over here on the right this price scale is percentage year to date percentage so again I'm sure this is very difficult to see but this is showing for QQQ that it is up 10% for the year and it was up if you look at the close on Friday it would be even higher so this is in the first month of the year QQQ is up 10% let's look at spy here's the number up about 5.6% for the year and let's look at a couple of stocks that were pretty crazy last week Tesla I think Tesla was up 30 something percent last week and then currently up for the year and here's Nvidia up about 35.5% for the year so that's interesting just kind of an unsustainable pace alright let's take a look at hero and look at some setups now and first of all the S&P 500 let's look at spy this is usually what drives the ES the S&P 500 and I'm going to zoom in a little bit on the morning and the thing that I really like about trading the S&P 500 is it often acts the hero often acts as a leading indicator and looking at the levels on the chart especially the SPX and spy levels and the spot gamma levels you pretty much know where price is going and where it's going to react and this gives you a leading indicator to look for those levels so first of all confirmation in the morning traders were taking positive delta positions and then as price approached that 4050 level and 405 on spy traders started fading that move and taking negative delta positions and then as price dropped down toward that zero gamma level traders started taking positive delta positions again and setting up a long setup so bullish confirmation for the first move up in the morning and then a bearish divergence setting up a short and then price moves higher again as traders take positive delta positions go take a look now one thing to keep in mind is that I'm going to jump from chart to chart and that's going to make it a little bit difficult to look at when I'm trading I have excuse me when I'm trading I have this hero chart up on one screen and either ES or spy up on another screen and what I actually did today I also have another computer and I have so I had hero up on that computer and then separated out book map charts ES on one chart on one screen and spy on another screen and I could see everything that way so let's take a look we'll take a look at ES and spy remember the turning points here the first at just after 10 and then the next was around 150 so let's go take a look at ES now so here is the the first reversal I'm going to zoom in a bit here and a couple things to point out just looking at order flow in book map you can see that this light blue line is showing iceberg orders so large traders were fading this move they were selling into strength and that's pretty typical and then price starts to roll over and again remember traders were already taking negative delta options positions and the dark blue line is CVD that's cumulative volume delta and that shifts down and then the yellow line is showing stop order so stop sell stops start firing we already knew that traders were taking negative delta positions they were buying puts and or selling calls and we'll take a closer look and see exactly what they were doing so here order flow in book map is confirming what options traders were doing and price shifts and moves lower and notice it did get above the 4050 level did a retest and continued to move lower scroll just a little bit here and then this reversal higher right at the zero gamma line and notice the large traders coming in now with buy icebergs so they were selling here into strength and then they start buying into weakness as price approaches the zero gamma level and reverses higher with this 4050 level as the target so about a 20 move higher 20 point move higher in the SPX ES from the zero gamma level to the 4050 level again heroes giving you a clue this is remember we looked at traders started taking bullish options positions positive delta as price was falling towards the zero gamma level and then so we're looking at that level and also the ES 4050 level but I think the generally the SPX levels are more important so as price approaches that level traders are taking positive delta positions large traders start start buying weakness with iceberg orders and price reverses at the zero gamma level and heads up to the SPX 4050 level two great setups this morning let's take a look at spy and sometimes the levels that they're important for price action also occur at spy levels so here's that reversal remember for ES for this first reversal there's no clear level shown here but you go to spy and that was exactly at this 405 large gamma three level so that is a a spot gamma level and LG three means large gamma three that's in the range of one to five being the largest amount of gamma and five being the lowest so this is again a three level so there's the price action and spy reversing so that's why I'm looking at spy on one screen ES on another screen and hero on another screen that gives me all I need to know to trade the S&P 500 and you can trade that in any number of ways you can trade ES you can trade futures spy shares spy options SPX options any number of ways to trade and one thing that I did today and I find this helpful I have now added the SPX levels to my spy chart and I do that in my C levels column here and I had that for ES as well this is an add-on that I use that I have a spreadsheet I enter the numbers in the spreadsheet and then it shows the numbers in this column and also draws the horizontal lines which I like to see on my charts so again looking at the S&P 500 traders let's go back and look at hero again zoom out clear divergent setups this morning again for the short and the long and what I normally do in the afternoon if I see hero not but hero doesn't have as much movement as it did this morning this is because I'm looking at a full day look back period so this is cumulative for the entire day and one thing that you can do to get a little bit more clarity as the day goes on is shift down the time frame and here it looks like options traders are still not doing much after this morning move so there's not a lot of clarity from hero for anything in the afternoon and so the question in discord self stops to open and close and I'm not sure not sure I understand your question alright so let's move on let's look at let's look at a couple of other setups here's QQ and remember the the shifts and levels higher were definitely bullish for QQQ so morning confirmation didn't last long and options traders start fading the move and price follows soon after so they were taking negative delta positions and let's just see what they were doing 30 minute window gives a better clarity even in the morning so they started buying puts and selling calls in the morning let's go take a look at book map QQQ so it looks like now they are actually taking positive delta positions again let's go to book map and there's a question about Tesla and I will I'll take a look at Tesla next so this chart looks pretty similar to the S&P 500 reversal lower at the volatility trigger as traders started taking negative delta positions buying puts and selling calls a little bit of reversal higher and then chop between 291 and 292 right Tesla definitely a good short setup this morning so here's Tesla I'm going to zoom in on this so first of all price targets at 170 being the primary target this morning and there's liquidity at almost every round number level let's go take a look at we'll take a look at hero look at Tesla and it looks like traders were taking negative delta positions pretty much from the open let's see so they were definitely buying calls they bought buying puts and they bought calls very briefly for the first maybe four or five minutes and then started selling calls so hero is definitely showing bearish hedging flow let's take a look at book map now go back to Tesla and the order flow is definitely bearish as well this is cumulative volume delta sloping down you can just tell all the pink dots in there those are market sell orders let's make the dots a little bit bigger a bit easier to see the thing about Tesla let's say opposed to the S&P 500 is often gamma levels are not in play like they are on the S&P 500 that's one thing that I really like about trading the S&P 500 is the levels that are in play are important and again you have a good idea based on what options traders are doing and what large traders are doing with icebergs and what smaller traders are doing with stops how price is going to react at those levels so anyway here's Tesla definitely bearish setup today hero providing a strong confirmation and then price targets clearly visible below all the way from $175 down to $170 and this is understandable again remember Tesla we looked at it a little while ago it was up what 56% 57% for the year and Friday it was up even more maybe 60% for the year that's one month and 30% last week so it's certainly understandable that traders would take profits so there's Tesla short setup a lot of nice trend breaks price targets below confirmed by hedging flow and order flow there's a question what Tesla is doing now notice all the pink dots there Tesla order flow is still still bearish see what options traders are doing still bearish look at the total signal that helps a little bit so overall though still I think again we saw that order flow is still bearish pink dots falling CVD and then hero is making a series of lower highs when you change the look back period to one day still definitely definitely bearish so that's Tesla and let's take a look at NVIDIA and another bearish setup hedging flow remains bearish and let's take a look at book map now a lot of pink dots there NVIDIA a bit of chop in the in the morning there's a reversal at the here's the 200 call wall and a reversal lower at that level all the pink dots start to come in I'm going to zoom in on this first move lower so we can see that a little bit more closely for the move down from 200 to 195 so it moved from the call wall down to the 195 hedge wall and the liquidity there so other than this brief move up to 201 this is kind of a some kind of wedge pattern lower highs finding support around this 198 30 level and then a break below so a couple ways to take this one would be assume the call wall after this move up and a retest was going to act as resistance and then a break of this pattern at the 198 level with a target primary target at the 195 hedge wall let's go back and take a closer look at a hero we'll zoom in so this is the first move lower in the morning and traders were selling calls and buying puts and here this if you were looking at a 30 minute look back period price is approaching the 195 hedge wall liquidity level and you see that traders start taking bullish options positions there good time to get out that's an exit signal okay those were the the best setups of the day actually there was let's take a look at one other snowflake and that's on my other computer let me I'll need to share my screen alright so there's snowflake let me try that again okay sorry about that snowflake so the quick move up in the morning trend break retest the 158 level and it moved down to liquidity at 155 and the 153 level let's go take a look at hero and confirm by options trades so confirmation here not nothing like the lead effect of the S&P 500 but a nice nice move lower alright I've got a couple minutes left and are there any any stocks on this list that anybody wants wants me to take a look at here's meta primarily calls driving trader selling calls let's take a look at bookbump oh Amazon okay we'll take a look at Amazon let's take a look at so here's meta quick move up trend break breaks the 150 call wall and liquidity targets down below at 149, 148 and 147 and hold on I seem to be having a not sure I'm seeing the correct screen on on YouTube I should be showing let's go to Amazon alright so here's Amazon take a look at hero strong confirmation up and down looks like mainly driven by calls in the morning let's go back and take a look at book map like a lot of other stocks early morning enthusiasm trend break reversal lower first target at the 100 call wall then the next at the 99 liquidity there a lot of pink dots pretty bearish order flow except for that reversal there in the big green dot back and take a look at hero looks like a little bit of a divergence reversal higher traders started taking bullish positive delta positions and then price reverses higher a little bit later a few minutes later and that doesn't really provide any additional clarity okay we've looked at all the stocks that I wanted to look at is pretty much all that I had so again I think for me ES and spy was by far ES SPX spy however you want to trade the S&P 500 was the easiest to read by far for me so there's a question in discord to look at ES one more time so look at spy we can take a look at ES too and this combines the SPX and spy signal and it generally looks just like spy and this is a this number is in dollar terms total cumulative hero this is very low traders are not apparently are not committing much before the F1C meeting you know it could be most likely most likely zero DTE options traders today as it has been for the past, at least past week or so coming into F1C and the employment situation report on Friday traders not committing much to long term positions and let's go take a look at we'll take a look at book map one more time let's just take a look and compare that number with spy so even lower with spy so interesting I'm looking at this dollar term here now it's less than 755K let's go take a look at book map and then we'll call it a day so here's ES it looks like it's finally broken through the zero gamma level there's a pretty clean trend line lower that has gone lower now and it looks like the next target below is the volatility trigger and that is the next support level below at 4020 so that's actually the first support level the spot gamma support levels today for SPX were 4,000, 4,015 and 4,020 let's take a look at spy so for spy the next level down is the 401 level alright so that's it that is the one last look at the S&P 500 Jonathan asked this is when dealers flip and yes that is the volatility trigger that is spot gammas proprietary gamma flip level where in this case that's for SPX their position on the gamma curve would shift from positive above to negative below okay I think that's all the questions that's all I had and again remember FOMC on Wednesday that will be during my session and we'll watch the S&P 500 and also hero to see how options traders are reacting after the announcement and also the start and then we'll wrap up just as the press conference starts so thanks for your questions and comments and thanks for watching and I will see you tomorrow thanks again bye