 Good morning. Good morning. Good morning. Good morning. How is everyone doing out there? So we're gonna have some fun today. I'm gonna pop the presentation out onto the monitor here So we can get this started just give me one second And if you'd like to watch this live you can do so on my YouTube bookmaps YouTube Twitter Or the bookmap discord. We're kind of all over the place today. It's pretty cool So hope everyone had a good holiday weekend break here You know, we're coming back into a market where there's some pretty consequential events that are going to be playing out here Not the least of which will be Nvidia earnings But I think Fed minutes will also be pretty important. But before we get into all of that Let's fire up this little presentation. I made for everyone So first up I'm markets of mayhem. You probably know me from Twitter YouTube or elsewhere I've been trading for 19 years. I started with stocks move my way into options forex futures and Navigated my way through the great financial crisis made some great trades made some big losers But learned a lot along the way in that experience and it's helped to shape how I trade being more systematic more oriented towards momentum and More disciplined in my approach over time You want to learn a little bit more about my work. I welcome that I have a website that helps traders with Education idea generation and tools. That's trader aid calm got a 30% off sale going on until tomorrow with the code prez 30 pe PR ez 30 also check out macro visor.com where we take momentum and macro to find Opportunity we find when the two are aligned there is a lot of potential longer-term trades and investments Of course check out my YouTube. You might be watching me on it right now But if not that's YouTube comm slash mayhem at YouTube comm slash at mayhem number four mark It's kind of a weird format there and then also we've got a pretty special offer with book map themselves up to 40% off You can go to trader aid comm slash book map and scroll down to the specials now Here's everyone's favorite part of this presentation where I would read this text really fast And then you can all tune out because that's it right? Half kidding all book map limited materials information presentations are for educational purposes only in should not be considered specific investment advice No recommendations trading futures equities and digital currencies involve substantial risk of loss And it's not suitable for all investors past performance is not necessarily indicative of future results All right, let's dive in to the good stuff First we have stocks net call volume absolutely Surging here now. This is one of several signs of potential euphoria And we're gonna go through a couple other charts that show the same And the reason is this is a bit of a theme. I think we are at risk of a pullback I think that pullback is much more likely to potentially start this week with some of the catalysts we have on deck and How the market is structured going into a period that tends to be more vulnerable. So with everyone piling in to Tech stocks, this is mega cap growth in tech call volume the highest we've seen since late 2021 it begs the question. What is the distribution of skew? How much are people paying and how much more are they interested in calls than puts? Well, that skew here for S&P single stocks is the highest we've seen since 2021 late 2021 right a bit of a theme here if you will what we're seeing and I think that warrants a bit of attention That is to say that people are really positioned for upside up up in a way and not really much else Now is that possible? Absolutely. Is it likely it becomes more difficult with this type of structure? And that's what I wanted to draw our attention to as we get into the week ahead. So next is we have CFTC overall buy side positioning is near five year highs in equities futures Okay, so this is like S&P 500 Nasdaq Dow Russell folks are really really really long So we see that they're aggressively buying calls. That's euphoric flow we see the positioning in skew and in CFTC overall buy side positioning in futures also quite extended So those are areas where you know, you can put up a bit of a yellow flag and say, okay That's mildly concerning. Now. We also can talk about breath That's a bit of a tired subject to know that we've been talking about it for quite some time But it actually starts to matter a lot more when you're making all-time highs When you're making all-time highs and it's on poor breath when like five stocks are leading the whole market higher That starts to look more like a blow off top. Is that the case here? We don't know yet, right? We'll be watching closely and we'll talk about some of the the risks that we're seeing But at the end of the day, I think that the lack of a broadening out is a concern amid these all-time highs now This is a chart of the distribution of Moves between the Nasdaq and the S&P traders are looking for much bigger moves in the Nasdaq this week Then the S&P that ratio is now about 1.5 So really looking for about a 50% bigger move in the Nasdaq than the S&P a lot of that has to do with Nvidia earnings Nvidia is now the third largest company in the United States fourth largest company in the world of course third largest company in the Nasdaq as well and the Goldman Sachs equity move model implies that we may be seeing some of the largest moves as We go in the next one month They're looking for a 31% probability of a 5% up move and 22% probability of a 5% down move. That's the largest if you look at this chart That's the largest probability distribution. We've seen For the upside since 2021 and for the downside since late 2022 hedge funds are really concentrated in semis ahead of Nvidia earnings We can see that in this positioning map here. This is really interesting to me I didn't necessarily think folks would be this Concentrated in this sector ahead of such a pivotal event, but here we are. We can see the socks index and gray semi and semi equipment that exposure in blue and that equipment exposure is the highest that we've seen since the summer of 2023 when you know things were getting pretty darn euphoric as well Then we saw meaningful pullback over the months ahead and the share of the top five companies by market capitalization the S&P the top five Annotated through history often is the case when it gets this concentrated There is some room for a Unfortunate event, so I don't want things to come off as too bearish I just want to kind of raise a little bit of awareness That there are a lot of alarm bells going off here and when they do I tend to post about them I don't try to you know drown out Other ideas, but I think this particular situation Calls into question the durability of what we're experiencing and you know whether or not it's a decent time to consider Maybe raising some profits and looking for some hedges six month out at the money S&P puts are Incredibly attractively priced here And let's look at the weight of the information technology and communication services sectors in the S&P Versus earnings earnings are not catching up with the way these are performing. That's another risk and speaking of earnings Guess what? We've got Nvidia earnings Wednesday aftermarket Everyone will be watching this. I think it will be a pivotal event For how the markets trade for the rest of this week and probably the rest of this month So I think this is gonna be a pretty important one. We did see what happened to SMCI on Friday That was a Extraordinarily lopsided trade Nvidia is actually not that lopsided SMCI was so lopsided on call positioning that it was probably the most distorted I've seen a single stock ever now We're not going into Nvidia earnings with those dynamics But we are going in with very very high expectations of exponential growth continuing in the future at the same time You do have potential competition coming online Intel and AMD have made different attempts to run CUDA binaries or Nvidia specific binaries on their own hardware and those Endeavors are actually making progress What does that tell us? It tells us that as time goes on You're not going to need Nvidia hardware to run code written for Nvidia hardware Which could reduce the demand for some of these really really profitable each 100 chips where they make them for about 3200 and sell them for about 30 grand now. Let's dive into some charts Shall we first up on screen? We've got the S&P 500 and we can see the Everyday moving average is really important here. We did get a couple of pops on it We also have this trend line right below. This is what I'm watching here I won't be getting too bearish until we actually break below both of these if we do then I think on a swing time frame We have room to the downside Okay in the near term We're just seeing a stalling of momentum a bit of a correction in time rather than price now Corrections in time can become corrections in time and price and so that would be require me seeing you know a bit of a move down here So I'm really looking at two specific spots, right? I'm looking at this 20-day moving average And so if price moves below that 20-day moving average I would be a bit concerned and then if it moves below this trend line That's why I'd start to get a lot more concerned because we do have a number of key levels particularly this 4899 125 if we move below that there's really not a whole lot of convincing support until 47 69 50 So I'm looking at this chart saying, you know, we're a little early to be going really short It's not a bad place to take some profits But if we do move below these two key areas, that's where I start to get a little bit more aggressive looking for downside The Nasdaq has a similar albeit more perilous look here That is to say it is now testing that 20-day moving average I didn't extend the trend line, but it's just above that as well and we can see down here our si is moving lower So that's telling you momentum is not on the side of the bulls and tech right now As we're seeing some signs that this is actually a little weaker than the S&P S&P looked like it was more kind of, you know Topping out at the same area the Nasdaqs actually not even able to reclaim that prior high And is starting to show some signs of potentially rolling over here The Russell comparatively looks better than the Nasdaq and in some ways better than the S&P as well Though I think some of this has to do with short covering that was happening last week because the Russell is really one of the Favorite shorts of hedge funds to balance out their portfolio. And so when they do When they balance out that portfolio, they're looking at shorting the Russell, you know going long mega cap tech, right? And so that ends up being a Bit of a pear trade they put on and when it's not working They tend to cover the Russell and last week it wasn't working so well So some of that upside there, you know, that might have been from hedge fund covering So just something to take into consideration. I know there's some bullishness on the small caps here I'm not saying folks are necessarily wrong But taking into consideration SMCI is accounted for like 85 of the Russell's upside this year And what happened on Friday might call into question whether that's durable or not Now we have gold on screen gold just trapped. It's just trapped in a range doesn't really seem to be doing much I do like some of the upside we saw late last week. It brought rsi over 50 I do still need to see gold push above this point of control and ultimately 2071 to say we have a chance at 2100 City group did put out a note. They're getting more bullish on gold. They're looking for the potential for $3,000 gold by 2025 But for me, I still need to see Really a breakout and honestly because this area here has been such An area of resistance. I really need to see a breakout above That 2098 level to be convinced that we're going to new all-time highs and gold So for now, we break above the point of control. We got room to 2071 50. We break above that We've got room to 2098. We break above that We've got room to all-time highs, but I think that that journey is going to be a bit tricky Next we've got crude oil, which overall still looks bullish But it is below this trend line here as of trading this morning when I took this I'd like to see it break above there and 79 75. I think if it does That's where we've got room for 86 52 You know, we can see some building up in momentum here with the rsi I'm still Leary though because we can see that this is an area that we're at right now where there's been a lot of Resistance and gold in the past or I'm sorry in oil in the past. We can see that in in multiple different areas So is this time different? Well, let's let price be our guide and tell us Now we've also got the two year note futures. These are really important for interest rates. This is kind of like Watching the market's expectations for the Fed the higher price goes the easier people expect the Fed to be The lower price goes the more aggressive. They're pricing in the Fed's resolve, right? So we've had this sort of rally and then coming down As we're starting to hit reality that maybe some of those expectations were just a little inflated for five to six cuts This year to start as early as next month So we're seeing a bit of a reevaluation here. I think if we cannot hold this 101 28 1 level that was support in the past We do have some potential to move further down And that could come with any data that suggests that the economy is stronger or inflation is coming back That tends to be a big mover of interest rates Similarly, we see the 10-year note futures also showing that look of rolling over consolidating of late But if they break up below 10901, I do think they have a lot of room to the downside Which should imply the 10-year note rate moving well above four and a half percent Euro USD actually looks like it's trying to stage a rally here interesting in light of rising interest rates Which is typically bullish for the dollar and the euro is the biggest counterbalance in the dollar index But nevertheless watching this one closely because it's broken above this downward trending line It's broken above the 20 day moving average and it could have some room to run here So we'll be watching this intraday to see what's going on with the euro another area that's somewhat Encouraging is rsi starting to break above 50 and then finally we've got the US dollar versus the yen And there's really nothing to like about the yen here. There's everything to like about the dollar We're continuing to see the bank of japan You know talk more dovishly their country is now in a recession So there's not a lot of reasons for them to look at tightening policy in the here and now So I do think that the yen has further risk to the downside Which tells me, you know the dollar could get back up to this old area this 105 91 area that's what I'd be looking for from this move before I take off my core So that's everything I have in the presentation now We're going to move over into book map and take a look at the markets and concentrate on some of this micro structure here if you're not watching this live on YouTube discord or elsewhere you definitely should You're going to get a lot more value out of it seeing everything live that I'm sharing than hearing it on voice Although voice is fine, you know, and I'm hosting the spaces and I appreciate y'all tuning in I think you'll be able to get a little bit more out of seeing what I'm talking about here So on screen I've got the s&p 500 futures We're just about 15 minutes away from the open kind of a flat trade here pre-market And if we look at the implied open here, it's about down 30 percent for the s&p down about 4 tenths of a percent for the nasdaq, you know So looking at a potentially downside open below s&p 5000 on cash Which is kind of important because there's a really really really large area of options positioning at that same level at s&p 5000 So let's take a look around some of the other parts of the market here. We've got the nasdaq nasdaq is obviously the more volatile brethren of the s&p. We actually see a really interesting Spread of resting liquidity in the nasdaq. This is somewhat unusual because this is not a very liquid trading vehicle most of the time So you can see the nasdaq order book depth is about 6400 I'm sorry 7400 across the entire book so when you see This many contracts sitting there waiting rather than moving with the bid particularly right under here this 115 at 17 655 That's noteworthy That's a decent amount of the total order book liquidity just kind of hanging out down there So someone is looking to either cover a short or buy exposure at that price We also see more resting liquidity even lower in the nasdaq now again The reason that I draw attention to this is it's not often that you see it Okay, so most of the time The nasdaq contract is kind of thin and you don't see a lot of resting bids or offers So this is this is different. This is unusual and it does suggest there's a lot of interest in lower price Russell is Seeing some negativity pre-market pulling down that point of control as we've seen some selling Small caps probably not set to have the best day, but we'll see what the cash open brings us Gold is just chilling above the point of control but consolidating We do see some distribution here as Throughout the period of time we've been watching the cumulative volume delta has gone from positive to negative indicating there is some distribution under the surface Crude pulling up it's a point of control and sort of a stair step pattern here I just rolled this contract over And so i'm just going to clean up the chart for some of these sub chart Labels here that get a little bit busy All right, and we see that uh, you know, there's just a bit of volatility here But overall going into today crude is just marginally lower And of course cocoa is wow, I don't have it on screen, but cocoa is nearing all-time highs again So that's been an interesting trading vehicle to your note futures Bit boring no real catalyst for this one today. I do watch the uh economic calendar pretty closely today We had a speech from bostic at 8 a.m We have a bowman speech from the fed at 1 p.m. We've got fed minutes at 2 p.m That's sort of the crux of the economic calendar for today And I don't see any real summary from bostics comments on the news feeds that i'm watching So maybe not too much discussed of interest Going to the tens similar to the twos not much of a catalyst there 30s pretty similar as well We do watch all this because some of the big moves in today can be led by rates Which I think is a really important intra market dynamic to pay attention to Then we've got the euro euro is continuing to move higher here This is something we talked about a little bit in the charts before we dove into book map that there was some room For the euro to continue moving higher because it had that double breakout And then we've got the yen which is also marginally higher We see the point of control pulled lower by sellers, but the yen is starting to make a bit of a recovery here So we've kind of gone the rounds across different futures contracts. I'm going to go back into the s and p here We're going to zoom out just a little bit We can see that there is a very large resting bid down here around 49 82 So that is going to be a level that's worth watching if we do have a pull similar down here around 49 49 And just below that we've got the largest second largest area of gross gamma exposure The largest is right here at this volatility Or this uh volatility trigger. I'm sorry. We don't have that on screen yet But this gamma flip level is right on screen and that is kind of important because if we do push below it Some of the uh dealer hedging dynamics are likely to change And what that means is below that gamma flip level that our naive model has calculated It is likely that you see dealer dealers more inclined to sell dips And buy rips, right? So that's different than the dynamic we're in right now We're at positive gamma positive gamma indicates buying dips and selling rips Which is kind of a compression or compressor of volatility, right? So if we do get into that negative gamma territory, uh, we do expect volatility could increase So it's something to keep an eye on And that's going to be you know, really pushing convincingly below es 5000 and building acceptance there Now as we're approaching the open we do see more resting liquidity building below us here Pretty convincingly large levels of resting liquidity. So there are other players in the market that are looking for this thing to pull back Today as well. At least that's how they're positioned now Cash opens in about nine minutes. So we'll see what it looks like after that Let's take a look around the news see if there's anything interesting as we get into today's trading day Oh, my partner Isha puts together an awesome note every morning that whether you're an investor or a trader should consider checking out called breakfast bites it's on trader eight and macro visor And uh, some of the stories she covered that I think are worth talking about china cuts their five year loan prime rate Leave the left there one year rate unchanged. So, you know looking at china There are some Stimulative measures being taken in increasing force by the government. There's also uh more stimulus happening for mortgages They've cut those rates as well So that tells us that, you know, they're still trying to get this economy off the mat But it is an economy that remains I would say troubled Home Depot had some comments on the consumer They said our market is on the way back to normal demand conditions pressures We saw in 2023 are receding demand for home improvement dipped throughout the year as consumers spent more of their dollars on experiences So that actually is a trend that I think is going to continue this idea of focusing on experiences now You know, rather than just saving and working hard and then hopefully one day retiring We see a lot of young people changing their attitude towards life So it's very interesting to see that, you know, even home depot is mentioning This the financial time shared some alarming concerns on us commercial real estate again This is all from isha's breakfast bites this morning And I think it is interesting. We are seeing Um pockets of regional weakness and it's really in the office building space That's where most of that weakness is And it's in major metropolitan areas San Francisco is probably the hardest hit So, you know, there's going to be some regional banks that take a hit on this I don't think it's going to be the big money center banks, you know I'm not really worried about j.p. Morgan or city group or Wells Fargo on account of commercial real estate But some of these regionals where their book their loan books are very concentrated in in office buildings They could have some trouble and the New York community bank situation could be a bit of a precursor Of what to be concerned about there So that's the recap of some of the most important stories One other I'll mention is capital wonder is going to buy discover financial deal deal value at about 35.3 billion. That's going to be one of the biggest deals that we've seen in a while It's certainly the biggest deal of 2024 and they're aiming to close that deal in late 2024 to early 2025 That's pretty big deal. I'm just going to zoom out a little bit more here. Well, we do see A big resting offer above us here around 50 75 549 contracts up there. That was it's a lot of call interest In spx if we adjust that for yes levels pretty close to that on friday And there is a call wall We're the largest area of net call positioning just up above And uh, I'm going to imagine that's at about I'm sorry. That's going to be about spx 5100. I think the delta at this point is about 1250 And so we are just about four minutes away from the open here Things can change pretty quickly once the cash open happens It's why I like to watch these liquidity levels It's also why I start book map quite a bit before the cash open because I really like to have that historical heat map of where things were So I get it a sense of kind of how those convictions and positions or at least resting bids and offers change As the market opens and then about 10 20 minutes after the market opens. We'll have a better sense of what the options activity are You know what's transacting where there's interest and that'll start populating on the spx options Visualizer tool that I built as an add-on for book map, which is now on their marketplace Um, and I find it to be pretty helpful for my own trading That's why I built it and then eventually made it available to the public Let's take a look at the nasdaq here, too We see a little bit of a pull ahead of the opening bell and we do still see those large resting bids below us We'll zoom out a little more So it's really just that pocket of liquidity below us. So we'll keep that chart zoomed in just like that Russell seeing a bit of a pull also seeing some interesting resting bids below it developing And gold chopping consolidating sideways here, but still seeing that cvd dropping some more distribution there Overall and I'm just going to clean up this chart of crude the sub chart indicators here. There we go And remember we're watching for basically crude to break 80 and then it probably has about another You know eight dollars higher from there Rates actually giving us a little relief ahead of the open, which is interesting to see stocks going the other way And that's across the twos the tens and the thirties And the euro climbing meaning the dollars weakening again making it a little more interesting that stocks are going the other way Typically these interest market dynamics would suggest that there'd be a bit more of a bid We'll zoom in a little more on the s&p ahead of the open here We've got about two minutes left opening bell in about one and a half minutes Google is preparing to roll out their gemini subscription with enterprise plans for workspaces Interesting. I guess if we rename Bard to gemini it suddenly becomes a viable product. We'll see how that goes Open ai's sorras weaknesses exposed shortly after high-profile debut this headline from benzinga a cat sprout sprouted an extra leg And a human's arm goes awry. So that software looked really cool at first, but Maybe it's not so perfect after all maybe it needs some work. It's very early stage I I still think it probably has a lot of potential But I'd be very concerned about the quality of deep fakes That could come out of something like that because boy some of that stuff did look pretty Pretty realistic the first go-around. Obviously if you watch the videos More and more you can start to see some of those imperfections in them And market is opening right Now So we'll zoom out a little bit see what changes in liquidity happen or do not happen We see a little bit more liquidity building above us here We are in a week where we don't have those supportive flows from the decay of puts in spx So that does open the possibility for Larger moves potentially to the downside should there be a catalyst and that's the big caveat there does need to be a catalyst Which is why when we're looking at rates in the dollar today, you know both going down That's relatively constructive for stocks But again, there are there's just such aggressive positioning All over the place that it does beg the question if everyone's loaded on to one side of the boat Does it start to tip over? Well, definitely have to see if Nvidia is that seminal moment or not And folks if anyone has any questions as I'm speaking, please don't hesitate to ask I'm always happy to help just make sure if you're on the bookmap discord, you tag me in And if you're any of the chat rooms, I should be I should see them But I you know, I'm in like Four of them right now. So I am just kind of periodically checking around to see where those questions may come up I see someone requested to speak on spaces. I'm sorry. I'm not going to take requests It wouldn't be fair to the other folks because they wouldn't be able to hear you So I won't be taking requests on this basis, but in the future I'll be more than happy to Do see a little bit of a bid As we see the market opening we're just in the first two minutes of trading here in the s&p Coming up about uh, you know four handles off those pre-market lows nasdaq much bigger bid Really quite a bit of excitement here the resting bids below us thinning out just a little bit So maybe that conviction waning The russell actually seeing a pull the opposite Move here than what we're seeing in the other stocks uh indices here Gold getting a bit of a pull lower crude getting a bit of a pull lower Rates continuing to move lower across twos tens and thirties And the dollar moving lower as the euro and yen move higher We'll go back to the s&p which is continuing to build on that earlier strength And this uh opening bid is on reasonable volume Typically is the case that a lot of transacting happens in the first hour hour and a half and the last hour hour and a half of the trading day The middle part is is generally a bit more hollow unless there are some outside catalysts So lots of institutions transacting here That's one of the reasons the volume is going to pick up right after the opening bell Let's take a look at the nasdaq nasdaq's actually seeing a little bit of a pull after that that bid from the open here Russell's bouncing off of its lows after dragging the point of control lower Just testing vwap here Intel and talks for 10 billion plus in chips act incentives. This is coming in from bloomberg The stock has bid to 4502 up three dollar up. I'm sorry one dollar and 51 cents three Point three nine percent So that probably gives Oh, that probably helped a little bit with this initial bid in the nasdaq, but uh semis are a very crowded trade right now So i'm not sure how sustainable that is s&p looking comparatively stronger to the nasdaq now i like to look at the nasdaq as a momentum leader So usually as the nasdaq goes the s&p goes and we can see a little bit of weakness coming into the s&p After the nasdaq started rolling over right so the nasdaq once again As I've said known like every single one of these streams it tends to lead and it is today in both ways So I do like to look at the 20 minute opening range to get a better idea of what the trend may be shaping up for intraday So we're about 15 minutes away from really being able to form that So i'm not going to try to make any decisive directional calls intraday until we've formed the opening range and broken out one way or the other Then we can talk a little bit more about what the probabilistic outcomes are on that basis And we'll have some options data to look at at that point as well Which will give a because give us a little bit of a better idea as to where those extensions may go nasdaq rolling over back to view app and the point of control there's some convergence there right around 17 680 Seems like there is some interest in buying around that level at least right now And russell kind of doing that same round trip that s&p were Let's see if the s&p is starting to stabilize. Yeah s&p is starting to stabilize didn't make quite the same round trip as the nasdaq But it's very low volume here not a lot of conviction in the current tape And seeing a bit of a pull again nasdaq now coming back lower breaking below the point of control liquidity below it starting to thicken up again as convictions of those bids seem to be rising looking for price to come down russell rolling over as well Gold getting a bit of a pop here, but still looking pretty bearish overall in the shiny stuff and crude rolling over Rates seem to be consolidating here across twos tens 30s still giving us a little bit of relief and the euro Giving back a bit after we hit this really large resting offer And we're just testing that gamma flip level here as well, which I think is pretty important Particularly if we move below it and build some acceptance That tells us that we start to enter a different trading dynamic, which is likely to be more volatile SMC stock is down five and three quarters percent. Thanks for the heads up on that one will that's pretty interesting to see And the call skew on smci as I was mentioning earlier was so so Absolutely nuts in terms of bullish upside speculation that an event like friday was all but inevitable and some continuation therewith Was not terribly unlikely and vidya getting pulled down about three percent here today Intel was up about three and a half percent earlier. It's giving that back. It's now up only about 1.89 percent Amd down 3.5 percent the semiconductor etf down 1.61 percent. That's smh smh is believe it or not 20 percent Nvidia now So it's pretty much the Nvidia etf If we needed one I mean the nasdaq, you know, the qqq is kind of the Nvidia etf as well So I guess we got a several different Nvidia etfs And that pull continuing now below that gamma flip level and filling in these areas these resting bids below us that we talked about Pre-open as areas of interest Where large players were looking for price to come down a bit before they were willing to buy Nasdaq similar look getting into these large pockets of resting liquidity below Where large participants who move lots of money around Were expressing interest in lower prices and they're getting that Russell similar look Pulling below the point of control. You got more liquidity building below in the small caps this 2000 levels pretty important Just about 11 points below us Gold chopping sideways crude pulling lower rates seeming to have bottomed here so far And the euro Pulling back a bit here Go back to the s&p which is continuing to pull back here Looks like there was a valiant effort by buyers early this morning to try to buy The pre-market dip and it just doesn't seem to be playing out caution is advised on weeks like this the The reason for that is really This is a a week where it is more likely that you get these pullbacks the risk of them are higher Because of the lack of those supportive options flows because it's not a well hedged market and because of how lopsided long positioning has become So you've got all these convergent factors That suggests that you know, maybe just maybe we're in a bit of a euphoria here We've had a bit of a melt-up and a pullback is healthy Does it mean we're like immediately going into a bear market or anything? But a correction in time or price as i've been saying Is healthy If you're you know bullish on the market or if you just have stocks assets like everyone, you know Then you don't want to see things go straight up led by just five stocks. It's not healthy You really want to see a broadening out And a bit of a rotation into some of the lesser loved parts of the market So it doesn't look like a speculative euphoria And uh, you know a pause is healthy a pullback is healthy So it's not just all you know Looking for uh bearish outcomes. It's more looking for markets to perform is one would historically expect them to perform In a way where we're not pulling forward so much of the future returns into the present So we can see the s&p getting just a little bit of a bid here. Let's take a look at the nasdaq similar look as well Again, we like to say the nasdaq is the momentum leader. Certainly today. It's given us a lot of those clues I think the nasdaq was the first to to to really pull back And uh, then try to stage a bit of a countertrend pop and then continue pulling back and the s&p followed And it seems to be continuing to do that and we see this resting bid below us around 4981 growing Now 670 contracts That's not big enough to be uh, what we call like an inverse death cloud I think it's a term horse my partner made up But uh, you know when you see like a huge thousands and thousands of Offers above us You'd call that a death cloud because typically price would get there and stop And then the inverse death cloud is like thousands and thousands of bids below us And it's just so much liquidity that typically you kind of run the other way Right almost contrary to auction theory. This isn't big enough to be that but it is big enough to act a bit like a magnet We're about 13 minutes into the trading day Going about as expected Still waiting for that 20 minute opening range to form where I can really Uh, be more confident about some of the statistical probabilities here But I'm just going to hypothesize that this is going to be a red day and uh, we'll go deeper red as the day goes on We'll see if the opening range confirms that before we get too much conviction about that idea Nvidia now down 4.85 see just uh A little bit of iceberg selling in the nasdaq here too on that pop someone came in with 234 And uh, you know, basically sold right into that So there is an appetite to distribute by some of the larger players These iceberg orders when you see them on top that means it's a sale and you can confirm by looking at the sub chart here And you can see how that pushed down the sub chart level So that was telling you that was indeed a sale. Let's take a look over here at the s and p There's a lot of selling aggression from 5 000 and below So for sellers to remain in control, they really got to keep this thing Below these levels if if price starts to move well above 5 000 Not only would that be above the point of control in vwap, but it also put a lot of these aggressive sellers off sides So they need to keep the momentum going They've got work to do to kind of be safe. It's not automatically a win for the sellers here if we pushed up, you know, 15 Handles or more they'd probably get a bit nervous and start covering some of those shorts Now we do see sellers pulling down the point of control here just happened That is a bit bearish to see that shows us there's a lot more volume transacting here And if you look at the session range volume profile, you can see that Right, you can see that 705. There's a lot of interest around this 49 90 level We should have our options data populating shortly here from the spx options visualizer for the intraday flows We do have the Larger positioning levels where we examine the entire options chain of the s and p still visible here Those are always there, but um, I calculate the top two calls and puts that are transacting on the s and p 500 And then I adjust them for the s and p 500 futures levels There's a delta of about 12.5 points now and then that populates on the screen So you can see it right now hot call 201 volume warm call 21 volume Right, and then you've got interest in the most active put contract That's the most active contract on the entire chain the hot put 210 traded there so far quite a bit lower than price So you can see Where larger traders are starting to indicate their interests. They're looking at lower prices Quite a bit lower prices on the put side about 1% lower from where we are right now And we'll keep an eye on those levels this spx options visualizer was built for book map I built it over the last several months tested it rigorously and now it's available on the book map marketplace 82 out of 104 economists Who are polled? Say the fed will be cutting the funds rate in quarter two A slight majority of 53 say in june 33 Say may i'm going to lean more towards july personally, but I could be wrong And those same economists are looking for rates to be cut by 100 bits or less in 2024 personally. I'm leaning towards less 50 to 75 bits is The higher end of my range of expectations particularly considering some of the inflation data that we've gotten recently from cpi ppi and Services pmi and manufacturing pmi all kind of indicating there are some risks That inflation could stay a bit more sticky plus wage growth still remains elevated And that's one of the drivers of inflation in the services industry as well They can see that most active put contract now moving up 1000 transacting actually right here at this area of a pretty significant interest So we we do see the warm put the second most active put still quite a bit below But the most active put strike is just about eight handles above price. I'm going to imagine That that shifts around as we trade here But this is still interesting to see and it could act a little bit like kind of pulling price back into This area around view app. We'll see What it does tell us at the very least is there's a lot of interest in transacting at that level just around the gamma flip level Just around view app and where there's a large pocket of liquidity above us Let's take a look at the nasdaq here It also seems to be trying to base sellers did pull that point of control lower Russell still hasn't seen the point of control pulled lower since we saw that at the open And it's a bit of a choppy trade it's kind of retesting that from below but with minimal volume There's like no transacting happening here Gold's just getting a little bit of a bounce here. Let's zoom out and see if there's any interesting liquidity Yeah 2045 129 on the offer there is Interesting. This is a thin trading vehicle too. There's only 4.8 thousand in the entire order book So that tells you that too. It doesn't take a lot of volume to move gold Crude getting a bit of a pop here. You do see some interesting areas of resting and quitting. This is another thin trader, right? There's about 7.9 thousand cumulative order book Across the entire order book So what is that? What's that telling you it tells you that this resting bid at 77 80 and this resting offer at 78 50 are both important. Those are important levels because we see large traders positioning themselves around them Let's take a look at rates Coming up they went a little bit higher as we saw that market pressure now We're seeing some relief just as there's some relief In equities as they're basing that's not a coincidence. The equity markets pay very careful attention to rates now There are divergences. They don't often last terribly long Particularly in this environment where everyone's watching rates pretty closely Let's take a look at the euro. It rolled over coincidentally around the same time the market was pulling back now We're seeing some relief Just as the market seeing some relief that those intermarket dynamics are really important to watch, right? So let's see if that helps Let's see if the the rates coming back lower and the dollar pulling lower helps these markets If not, if there's still that level of relative weakness, that's a further indication that This is kind of a bearish distribution day. We have formed our opening range here, right? So we've got the top of the range here at about let's just call it 5850 And we've got the bottom of the opening range here at about Let's call it 49 89 make it clean if we break below that 49 89 and build acceptance That's an opening range break lower and that statistically indicates the probability of continued downside Nirav that's an interesting question You know in terms of stops the way that I contextualize that we are seeing this Now break below the opening range by the way, let's see if we build some acceptance But so far this is looking pretty bad for the the spools or the s and p so I look at stops as Price sensitive momentum driven interday trading for the most part And so when you see a really large blowout of stops like right now We just saw 282 stops like there are buyers stopped out having to sell their contracts, you know, I like to see To kind of contextualize it. I like to see passive accumulation As there's active distribution. So what I mean is like in this scenario to say like we're approaching a potential bottom and reversal I'd like to see a much higher level of stops say 500 a thousand at the same time. I'd like to see icebergs absorbing them On the buy side when I see both of those I get a little bit more excited that there is some potential For for the market to run right to to reverse and run higher We're not seeing that in the here and now I think a lot of this has to do with technical traders getting pushed out You know, some folks were probably looking at the bottom of that opening range and saying boy if it really breaks that decisively lower I'll stop out But it's for me. It's not until I start to see exhaustive levels of stops in in a nutshell without the iceberg participation That I get a little bit more interested and for me in the s and p 282 is not quite that again I need to see like 500 or a thousand And then price starting to move the other way what that would tell me is you you kind of had a big stop run and now maybe we're starting to to see things normalized under the Training by stronger hands who are a little bit less sensitive to price But right now we see a little bit of the opposite. We don't see Exhaustive stop run we do see liquidity building below us and we don't see institutions really interested in taking large buy side positions by icebergs Let's zoom out and look at the liquidity boy that hot put moving all over the map here today The warm put down here at 49 70 That's where there's a resting bid of 308. So that is convergence That means that this level is really important But we still need to chew through a very large resting bid just about 49 82 to get there This is now a large enough resting bid where it may act as an area of support It is over a thousand between these contracts being stacked up the 234 the 205 and the 677 So I think that's important to watch How do we react at this level? But overall we did see the opening range broken to the downside now. We're kind of retesting that Let's see how this goes, but I'm inclined to look for prices to go lower today Then where they are at present. Let's take a look at the nasdaq the nasdaq looks more bearish in the s&p It is our momentum leader. So we do want to pay attention to that Got about five minutes left on the stream want to thank everyone for tuning in I do these every Tuesday at 9 a.m And then I stream on a couple of other channels throughout the week as well including on the trader aid discord If you're interested in checking out trader aid, we have a 30 discount until tomorrow There's only about 20 coupons left. The coupon code is pe P. I'm sorry. P. R. E. Z. 30 pr ez 30 at checkout You can also get up to 40 off book map by visiting trader aid.com slash Book map it'll redirect you to a page scroll down to the bottom You'll see the specials and the spx options visualizer that you see on screen is now live in the book map marketplace You can visit trader aid.com slash spx or search spx in the book map marketplace to find it And if you enjoy the stream follow me on twitter mayhem for markets or on youtube same name mayhem for markets To find more of my content. You can find my work at trader aid.com and macro visor.com Good question a demo trader. So no, I I don't have any relationship with uh, let me just tell everyone out there Because I got a lot of folks listening How does the spx options visualizer get it to get its data is what I was asked Does it do so from spot gamma? So to be perfectly clear, I have no relationship with spot gamma I respect their work, but I built my own tool my own algorithm my own engine in python And that engine goes over about 10 000 data points in cboe's options data every minute So it's much higher frequency Than what you might see from spot gamma Where they're updating it like once a day And that's fine for folks that are you know slower time frame traders I'm sure that works fine, but what I tried to offer is something that is both more cost effective and higher frequency So it pulls that data in it factors it it has an algorithm that's processing it every minute And it updates that data and it puts it out through the book map api And then you can download it. So there's pretty low latency um And the algorithm is something that I've been working on for about six months And I finally got it to the point where I feel like it's production ready And so I've released it, but we've been using it also on the trader aid discord for some time So I've had the help of our awesome community in testing it as well And someone asked how much is my new add-on it is 40 a month or 400 a year Got about two minutes left on the stream. Thank you so much everyone again for tuning in really appreciate it Have a lot of fun doing these Yeah, you're welcome. Great question. Let's take a look here at the nasdaq Just again point of control being pulled a bit lower by sellers So this does look like a distribution day to me overall the rustle is also getting this bid to me That kind of looks like we're seeing that k-shaped short covering where nasdaq is losing You know some of the big positions that hedge funds are in are losing and the rustle is is is getting bid Off of its lows, which is kind of an indication There's a bit of of shrinking of the book that is to say deleveraging Where you're covering your shorts and and exiting some of your lungs. I think that's part of What we're seeing in today's tape so far We'll revisit the s&p one last time I'll zoom out for you all so you can take a screenshot if you want to take a look at these levels here But we do have a lot of interest below that hot put moving lower So you can see the folks that are transacting the options market They're interested in prices either quite a bit higher or quite a bit lower, but not not really right at spot so it does Provide greater potential for a more volatile day as the day goes on there is more interest in the calls than puts right now The most active two call strikes exceeding the most active two put strikes by about a thousand each So to summarize We broke the opening range lower. We've got a lot of interest below I think this a 49 80 level is going to be Really pivotal if we do break below it. I think we've got some pretty decent chunky room to the downside here Particularly down to 49 70 and then this hot put level which is dynamic It'll move as transacting changes throughout the day, but for right now it's about 49 64 So, thank you everyone for tuning in. This has been my stream Back to the futures with markets and mayhem really appreciate you checking it out I'll catch you next week on Tuesday on the book map youtube And I'll be around twitter youtube and the trader a discord for the rest of the week sharing my thoughts and insights Talk to you soon