 Hello everyone, I'll get started in just a moment. Hello everyone, welcome to Options with Doug, streaming live daily on Bookmap Discord and the Bookmap YouTube channel at 1.30pm Eastern Time. Before I get started, I need to go through the Disclosures. General Disclosure, all Bookmap limitant 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. The focus of my presentation, the focus of the Options-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 is planning, and I use positional analysis. And the second step in my process is execution. And I look at real-time order flow in Bookmap and real-time Market Maker hedging flow in Spot Gamma Hero for setups and to confirm my thesis and positional analysis. I'm looking at how traders and market makers are positioned in the options market and how those positions change today from day-to-day to develop a thesis regarding the expected trading range for the day as well as a directional bias. And then again, I'm looking at real-time order flow in Bookmap and real-time Market Maker hedging flow in Spot Gamma Hero to confirm my thesis and for setups. And for setups, I will be talking about underlying assets, whether that is futures or stocks, and those setups can be taken any number of ways. For example, with the S&P 500, you can trade futures or spy shares or SPX or spy or actually ES options. And questions and comments are welcome, and I will be watching the options-dog chat channel on Discord and the chat and YouTube for your questions and comments. And please post your questions and comments. It will make the presentation more interesting for me as well as hopefully everyone else. All right, let's get started. My agenda for today, the things that I want to talk about, I'll first of all go over news items for this morning today and the rest of the week. Then I'll go over my positional analysis. And then if I have any time before the 2 p.m. FOMC announcement, I'll go over a few setups. Otherwise, we will stop at about 1.59 and start looking at the S&P 500 futures. As the announcement comes out, the FOMC announcement at 2 p.m. All right, so the news items. First of all today, there were a couple of data releases this morning. The services, PMI, came out. There were two different versions. One came out at 9.45 a.m. Eastern time. That was less than expected or lower than expected. And then another version of the services PMI came out at 10 a.m. and that was better than expected. And then the market did have, seemed to have a negative reaction after that. And then of course tomorrow, this afternoon, the big event for the day is the FOMC rate announcement at 2 p.m. and then the press conference begins at 2.30 p.m. So again, we will stop whatever we're doing right before and start watching the futures. And just to kind of set the stage for the announcement, here's the FedWatch tool showing the current target rate at 475 to 500 basis points. And the expectation for a 25 basis point increase right now is showing at 83.6%. And there's a 16.4% chance, according to this FedWatch tool, for no increase. All right, so that's what the FedWatch tool is showing now. And then for the rest of the week, tomorrow, Apple reports earnings after the market closes. And then on Friday, the big employment report at 8.30 a.m. Eastern Time, that is the employment report that comes out on the first Friday of the month, every month. All right, so that is the news, economic data, and events for the week. And again, the big event is the FOMC announcement at 2.00 p.m. And we will be watching that live. All right, let's take a look at charts now and get started with positional analysis. And this should set the stage for the announcement at 2.00 p.m. All right, so first of all, this is the SMP. I'm sorry, I just realized my mic was on mute. So again, we're going to watch the FOMC announcement at 2.00 p.m. And we'll start with the positional analysis to get prepared for that. So first of all, this is the SMP 500 futures, ES, and Bookmap. And before I take a closer look at this chart, let's take a look at a larger time frame. I'm going to start with a, here it is. Start with a larger time frame. This is a thinkorswim chart showing price and key levels. For about a 20-day look-back period, actually this goes all the way back to the beginning of April, showing that the SPX is traded in a very narrow range for most of the month of April, deviated below that a little bit last week, and then deviated above it last week as the megacap tech stock earnings came out. And then now is back within that range of about a narrow range of $4,100 to $4,150. All right, so that's the price action for the last month. Now let's take a look at some key levels. These are Spot Gamma levels provided to Spot Gamma subscribers for a variety of platforms. This is, again, thinkorswim. And this is showing the put wall. And that is the strike with the largest net, negative gamma. And that can be expected to act as support. And note this level did drop from $4,000 yesterday. And that is somewhat bearish. And then here's the $4,000 key gamma strike. That's the strike with the largest absolute gamma. Here's the volatility trigger at $4,110. And that is Spot Gamma's proprietary gamma flip level. Below that level, market makers position on the gamma curve is negative, and they have to trade with price to hedge their delta exposure. And then above that level, like the SPX is right now, market makers position on the gamma curve is positive. And in a positive gamma environment, they have to trade against price to hedge their delta exposure. So that tends to subdue volatility in a positive gamma environment and increase or enhance volatility in a negative gamma environment. And right now, again, SPX is trading above its volatility trigger. And then the last key daily level that I track is the call wall. And that is at $4,200. And that's the strike with the largest net, positive gamma. And that can be expected to act as resistance. So there's the range of the key daily levels. I'm also showing the daily expected move. There's the lower bound in the upper bound of the daily expected move for SPX. Then that's the dash blue line. The dash purple line is showing the range of the weekly expected move. And these are based on the options market. So note so far today, SPX is trading well within its daily expected range, which is about 40 points, plus or minus 40 points, around the open today, which is higher than it has been in the last few days. And that's, of course, based on the heightened volatility due to the FOMC announcement. All right, so that's the expected range for the day and the week, as well as the key daily levels in a chart looking back to the beginning of April. Let's take a look at another thinkorswim chart. And this is a one day, one minute chart showing the levels that are in play for today. And again, this is showing the lower and upper edge, the daily expected move. And then the levels that are in play, the spot gamma levels, here is the 4100 level below, the 4110 volatility trigger, and then the 4150 level. All right, so that's SPX. Now we'll take a look at Bookmam. And I'll talk about setups in a few minutes. And so far today, the S&P 500 is traded in a very narrow range. And I'm showing the same levels on my chart. First of all, this is the spot gamma cloud notes. This spot gamma provides these levels for a variety of platforms to spot gamma subscribers. And it looks like my levels today are in sync with what spot gamma is showing. So I have my own cloud notes here. And I'm using a point difference between ES and SPX of 17 points. And that looks like that's the same as what spot gamma is using. This is the SPX 4150 level noted as resistance in the spot gamma AM founders note. And that is at an ES level of 4167. And also I'm showing key SPI levels. There's the 412 key gamma strike for SPI and the 411 volatility trigger for SPI. And then here's the 4110 volatility trigger for SPX. So those are the SPX and SPI levels that are in play for today. All right, let's take a look at the NASDAQ now. And I'm going to start with a thinkorswim chart for QQQ showing this is a one-day one-minute chart showing the spot gamma levels for QQQ. Here's the volatility trigger at 319. And then price has basically been chopping up and down around this 320 large gamma 2 level. And note how flat VWAP is. That is this light blue dotted line. All right, so that is QQQ. Now let's take a look at the NASDAQ and pretty choppy session there in NASDAQ. Again, price moving up and down around this 320 large gamma 2 level. That is the QQQ level. All right, we'll take a look at setups in a minute. Let's continue with the positional analysis now. There were quite a few shifts in levels, all down, all negative, all bearish. First of all, as I mentioned before, the SPX put wall dropped from 4,000 yesterday to 3,900. And then SPY, the volatility trigger, dropped from 414 yesterday to 411. And the key gamma strike dropped from 415 to 412. So far, that is just take a loan, that is bearish. And then QQQ, the volatility trigger, dropped lower from 323 to 319. The put wall dropped lower from 315 yesterday to 310. And then the key gamma strike dropped lower from 320 yesterday to 315. All right, let's take a look at the gamma levels. Now the absolute gamma levels. And just see where these levels come from. And we'll start with SPX. What this is showing is market makers position of each different gamma strikes. These different strikes showing absolute gamma. And above the zero line, positive gamma, or called gamma, is shown with the orange bars. And below the zero line, negative gamma or a put gamma is shown with the blue bars. So here's the absolute gamma strike at 4,000. That's pretty obvious, the strike with the largest absolute gamma. The put wall at 3,900. The strike with the largest net negative gamma can be expected to act as support. And then here's the call wall at 4,200. The strike with the largest net positive gamma. And note there is significant amount of gamma at 4,150 and 4,100. And so far, those levels seem to be containing price, at least for the time being. That price could potentially break out of that range with the FOMC announcement. All right, so that is the SPX. Let's take a look at SPI. Zoom in. All right, so for SPI, again, orange bars are showing positive gamma or a called gamma. Blue bars are showing negative gamma or put gamma. So for SPI now, 412 is the key gamma strike. There's the put wall at 400. And that's pretty obvious. Strike with the largest net negative gamma. And then the call wall remains at 4,20. So that is the ceiling for SPI at 4,20. And the floor at 400. Let's take a look at NDX. And I'm going to have to do a refresh. Go to NDX. So for NDX, here's the 12,975 absolute gamma strike as well as the call wall. And the call wall and the key gamma strike have been at that level for quite some time. And then the put wall is at 11,000, and that's not shown on this chart. Then let's take a look at QQQ. And we'll zoom in here. So for QQQ, 315 is the key gamma strike. And then the put wall is at 310. And then the call wall remains at 325. So there's the ceiling and the floor for QQQ. Right, well I'm on this page. I want to take a look at one other thing. Go back to SPX. I'm going to take a look at the Vana model. And what this is showing, for SPX is how market makers delta notional shown on the vertical axis will change with changes in price shown on the vertical axis. There are two curves. First of all, this light gray line is showing how market makers delta notional changes with changes in price only. So what this is showing is as price increases, market makers delta notional will increase and they will have to sell futures to hedge their delta exposure. And just the same, so that is a positive gamma environment to the right. Then in a negative gamma environment, market makers delta notional will increase and they'll have to sell futures. So they're trading with price in a negative gamma environment and trading against price in a positive gamma environment. All right, the pink or purple curve here is really the one that we need to look at and that adds implied volatility. So that is showing how market makers position how their delta notional changes with changes in price and with changes in implied volatility. So on the upside here, what this is showing is when you account for changes in implied volatility, market makers will not have as much delta notional to hedge as this delta only line, the gray line predicts. So when you add in implied volatility to the equation, again, they're not going to have as much delta notional to hedge on the upside. Then on the other hand, as price decreases and implied volatility increases, the addition of implied volatility is indicating that market makers will have more delta notional. Oh, RJ says I'm broadcasting just voice and discord. Oh, I'm sorry. Okay, how's that? Can you see my screen down on discord? Okay, great. I'm sorry about that. I'm talking about the Vana model here, and again, this pink curve is showing the Vana effect, the change in delta with the change in price. All right, so that is, just we'll take a quick look at how this has shifted over time, and this is showing from the last two days to today more of a less positive gamma environment for market makers. And let's just take a quick look at SPI for today. So a little bit more or less positive gamma environment for SPI as well as QQQ. Okay, so let's take a look at some setups now. Actually, let's take one last look at data, and I'm going to take a look at the spot gamma index, and this is a proprietary indication of the market maker's gamma position, and these numbers have all shifted negative in the last couple of days, and this is confirmed by the Vana models that we just looked at. So this is showing gamma notional, gamma index. It's a proprietary measurement of the total amount of market gamma, and it has shifted from very positive to less positive today for the SPX, for example. All right, let's take a look at the setups. We'll start with the S&P 500, and this is the total signal for the S&P 500, and there were a couple of really good setups with HERO today. First of all, there was a divergent short. Note that HERO starts making, starts moving lower, and then price follows. That's somewhat of a divergent, somewhat of a confirmation setup, and then this divergence long, HERO starts rising, and the price follows. So that is the, this is the total signal for the S&P 500. It's combining SPX by XSP and ESF, ES, ES Futures, into one signal, and again, setting up a both, kind of a confirmation divergent short in the morning, and then a divergence long around 11.15, 11.30. And let's take a look at the individual components of that signal. We'll start with SPX, and SPX looks pretty close to the total signal. Let's take a look at SPY, and pretty similar to SPX, and then here's ES Futures. And today the ES Futures are really not in sync with the other signals, which is just the opposite of the last couple of days. All right, let's take a look at book map now, and we'll see those setups. Let's go back to ES, we've got about two minutes, so I'm not going to dwell on this, but here's the short setup just around the time the 10 a.m. data came out. And note the reversal and order flow. Green volume dots, shift to pink volume dots, price moves lower to the lower edge of the expected move, where traders were starting to take positive delta positions, options positions, and price move back up so far to the ES 4150 level. All right, let's take a quick look at NASDAQ. More of a choppy session in NASDAQ, but the NASDAQ signal provided good confirmation of a short, actually a long first thing in the morning, up until about 10, then a short, then a long again. All right, let's go back to book map now. So those were good setups both in the S&P 500 and NASDAQ. There were a few in stocks. Well, if we have time, if nothing is happening in the futures, we'll take a look at those, particularly Nvidia and Tesla. All right, so we've got about 15 seconds. I'm going to zoom in a bit here and there it is. All right, so it looks like a quarter basis point, as expected. 25 basis points, a quarter point. So far, the algos like what they've heard, and now they're parsing the statement. Actually, the algos have probably already read it and done their thing. So far, a bullish reaction. Let's take a look at what options traders are doing. How's my audio? Can everyone hear me okay? Okay, good. Just sound a little strange. All right, let's take a look at hero and see what options traders are doing. We'll go to the S&P 500. That's the... Here we go, S&P 500. Zoom in on this. Go to a shorter look back period. So it looks like options traders are so far fading the move. They're taking negative delta positions. Actually, they're buying calls and buying puts. The put buyers are winning. And now price is moving lower. All right, so there's a question in you, too. What are your hero indicators now showing? Do they add puts or calls after the rate decision? So this is showing... Let's go back to hero. So what hero is showing, this is from Spot Gamma. The white line is price. This purple line is combining puts and calls for SPX, SPI, and ES futures into one signal. This is showing market maker... traders are buying and selling puts and calls in those three instruments. And this is showing how market makers are hedging. And it's kind of a proprietary calculation. So the net thing to take away from this is that traders right now, and I just have a 30 minute look back period, traders are taking negative delta positions and actually it's somewhat chopping around right now. Let's take a look at a shorter look back period. We'll go to 10 minutes. So now it's just like a 10 period moving average. It's just looking back on the hero signal for the last 10 minutes. And there's a very strong correlation between options trades, hedging, flow and price action when I shift down to this very short time frame here. So Mobi, I hope that answered your question. If you have more questions about hero, I suggest you go to spotgamma.com and go to the free resources and look at the again, go to the free resources and look up hero. And there should be plenty of information there. Let's go back to price. Interesting that price is making a series of lower highs, following that trendline down. Now it's broken and it looks like larger traders are baiting this move with iceberg orders. And that's shown here, here, here. Right, so it's only been about seven minutes. Let's go back and take a look at hero. So now there's divergence and options trades and price could be potentially setting up a short. Let's go back and take a look at hero. Now the hero signal has shifted higher. Following price looks like large traders are still fading this with iceberg orders, but not any significant size and this jump up was fueled somewhat by stop orders. So looking at that hero divergence this would have been a good short setup right here. This trend break at $41.50. Let's take a look at the Nasdaq and let's go, we'll take a look at hero for Nasdaq. And again remember we're on a a 10 minute look back period. So a very short timeframe. So that little pop up, the Wall Street Journal saying signals a potential pause. Looks like that would have been bullish. Let's go back to the S&P 500. So again that short at the $41.50 level would have been a good setup. Let's go back and take a look at hero. There's Nasdaq. Let's go back to the S&P 500. And again a reminder we're on a 10 minute look back period. So very short very short timeframe. So far trending lower. Options traders are fading the move. And they're buying puts. And also they're buying calls but there's like a 10 times difference between the put buyers and the call buyers. So just a moment ago that was about minus 426 million versus minus 24 million or positive 24 million for calls. I'm looking at the notional values right here. For calls the orange line and puts shown with the purple line. And now that's shifting higher. The total signal let's go back to the bookmap chart. S&P 500. Alright does anybody have any questions or is there anything in particular you want me to take a look at should we stay on the S&P 500 here. We'll take a quick look at Nasdaq. Pretty similar price pattern to S&P 500. Alright so in YouTube Ben asked would you please explain how hero notional value affects price again. So the one of the key tenets is that options trades and market maker hedging flow are a key driver a price action in futures and some stocks. So when traders let's just take a look at SPX for example so when traders take positive delta positions let's say they are buying calls in SPX market makers sell the calls and they have to buy futures yes futures to hedge their delta exposure. And when they buy puts market makers sell the puts that is a so market makers position is positive delta and they have to sell futures to hedge their delta exposure they want to remain delta neutral. So really the easiest thing to do is to look at the total signal and see what the net net value is and that's what I'm looking at now. So now it has shifted to net positive again I'm just have a ten minute look back period and this is a positive number indicating that when you combine the signal for puts and calls for SPX, SPY and ES this is all slightly positive in this ten minute look back period. Alright so RJ asked he wants to look at the total S&P 500 signal over the last five days so we can do that so I'm going to change first of all I'm going to go to the one day signal and then I'm going to go back on the calendar here to well actually I'm not sure how to get in this case would be the change in month it's not showing April so I can go back three days so now I'm showing from May 1st to May 3rd in this total signal here so what this is showing this is back on May 1st showing overall the hero signal what's negative on that day this is the overnight and then this is positive for yesterday traders were buying calls yesterday and then so far today it has been negative up until just a few minutes ago when it has shifted positive again so RJ I hope that answers your question this is as far back as it's letting me go so let's go back to today I'm going to change this date rate back to today so I'm just looking at today let's zoom in on the RTH session so now I have a one-day look back period so this is a cumulative signal for the entire day for all of the components of the SAP 500 SPX, SPY and ES and this is the total notional value it is positive let's go back to a shorter time frame again this time I'm going to go to 30 minutes now let's go back to book map we'll go back to hero so this set up a nice long here as hero was continuing higher either take it at the bottom there at the reversal or there is a second entry here this pullback and then the move higher as hero continued straight up and that would have been the reversal of the SPY 412 keygamma strike and let's just take a look at that on the SPY chart we'll have to zoom in so there is the reversal at the SPY 412 the move higher good entry point for pullback long let's just see what VIX is doing so this is VIX one day I'm just going to change to the VIX so now VIX is dropping as expected the data is out no more uncertainty let's go take a look at NASDAQ now nice 50 point move higher at about 211 order flow is generally bullish and here it looks like larger traders are actually going long here with buy iceberg orders to hide their size let's take a look at hero for NASDAQ and again we're on a 30 minute look back period go to the NASDAQ signal and this is not providing as much of a lead effect as the S&P 500 signal right so on YouTube Mopi seems very complicated and subjective I agree if this is the first time you're seeing this and no I don't have any back test of this indicator and hero going does hero going up have any predictive power for future index returns and I'm talking about day trading and yes I think it does and I anything that I see in my either my planning or with hero here in this hedging flow I confirm with price action and order flow in book map so just because hero is going up doesn't necessarily mean that I'm going to go long if I see something that conflicts with that or contradicts that in book map for example then I would wait or it's not perfect nothing is perfect and yes it can be complicated but I'm looking at a number of things at any one time again primarily order flow in book map hedging flow with hero and then also the levels and how price reacts at certain levels and often what hero will show is options traders reacting as price approach at certain levels especially for an index and that can be a great leading indicator so when I see a hero divergence here like NASDAQ is showing where hero this purple line is dropping lower and then I would go look at book map for a potential reversal and confirm that in book map that was that divergence short with NASDAQ was a potential short scalp and you can see the change in order flow green volume dots market buy orders to market sell orders and no price is trending up there's no discernable level for a reversal so I would assume this is just a pullback as price moves higher until it makes a lower high let's go take a look at the S&P 500 and we'll go take a look at hero for the S&P 500 again we're on a 30 minute look back period and also mobby keep in mind this is kind of a special circumstance right now with the FOMC announcement and the press conference starting in about 5 minutes 4 minutes so this is a special circumstance I showed a couple of excellent 2 or 3 excellent setups on NASDAQ and the S&P 500 this morning using hero so in the SPX the setups that I showed this morning where there was a divergence short and a divergence long and the NASDAQ signal gave more of a confirmation signal for a long a short and then a long so the reason I use this I want to be on the same side that market makers are I want to trade in the direction they're trading and that's what hero shows me alright let's go back to book map there's the S&P 500 and so far now it looks like the price action order flow after the announcement and before the press conference has resolved to bullish let's just go take a look at the price action for the day and so far bullish for the day so I hope that answers your question so yeah this was just a pullback that I showed before and now another pullback and the NASDAQ is also bullish for the day alright any final questions maybe it looks like a more significant pullback here let's just see if that was signaled by hero for the NASDAQ and it was for the S&P 500 so here hero acted as a leading indicator for a short setup and this is the S&P 500 so let's just go back and look at that and see if that was confirmed with order flow and it was somewhat there's no significant level there could potentially be just another another pullback but again the press conference is beginning now let's take a look at NASDAQ and then we're going to take a look at the hero signal for NASDAQ and then we'll wrap it up so a divergent short both in the S&P 500 and NASDAQ and just a reminder I mention this just about every day I'm only presenting on one screen so I'm jumping back and forth between hero and book map and I have actually several computers for my main computer I have two monitors and I'm looking at book map on one computer on one screen and hero on the other screen so I can see this simultaneously alright I'm going to wrap it up here the press conference beginning now I can see Jay Powell starting to speak on YouTube so I'm going to wrap it up here I want to apologize for the technical difficulties the voice in the screen looks like we got it all resolved I think I've answered all your questions and I want to thank everyone for watching thanks for your questions and comments and tomorrow we'll go over the aftermath of the F1C announcement and press conference so thanks again thanks for your questions and comments and I will see you tomorrow