 Hey everyone, good morning Welcome Hope you've had a good trading week. I know it's been a bit tumultuous out there So we're gonna be covering several different markets this morning and We're gonna look at the markets through book map as we get closer to the open here Getting some hawkish jaw boning from the feds Jefferson here. So I'm just listening to those headlines crossing Basically saying patience is something that they're okay with at this point So let's kick this off This is back to the futures with me markets in mayhem We're gonna be looking all over the map in terms of different asset classes We're gonna be looking the S&P Nasdaq Russell 2000 will be looking at bonds Commodities currencies might even throw a Bitcoin in the mix and we'll also have some popular stocks on-screen So let's first kick this off with everyone's favorite slide the disclosure All book map limited materials information and presentations are for educational purposes only and should not be considered specific investment advice No recommendations trading futures equities and digital currencies involve substantial risk of loss It is not suitable for all investors past performance is not necessarily indicative of future results All right, so I think we're all on the same page there. So let's kick this off here Just doing a couple adjustments on my end as we get everything going I think we're in good shape So let's learn a little bit more about me if you're not familiar with my work My real trading journey began in 2005 funding my own account and trading stocks and moving on to options futures and forex and I got to navigate the great financial crisis as a young trader Was pretty formative experience. They say that hardship builds character. Well, I had some great trades I had some terrible trades and I learned a lot from both sides But that hardship that experience of seeing the economy crumble before my very eyes the financial system imperiled Certainly helped to grow my appreciation for risk management and as a trader is that's our key goal Everything else fades in the background if you can't manage risk you can't trade At the end of the day, that's where the foundation is built So for me it was actually really important and also helped me to get a better appreciation of how important intermarket dynamics are Momentum and macro and how they can intersect and set up some great longer-term swing trades All of that for me was very formative So my approach as a result is systematic It's driven by momentum price action options flows and positioning as well as volume profile And then I like to zoom out. I like to look at the macro big picture for the longer-term investments in trades as well as fundamentals And I began working with the team at book map in early 2022 because I saw a great value in the way their platform Including the heat map icebergs and stops Added to my ability to understand what the dynamics were that were driving the market For example yesterday, I posted about what I call a death cloud We've been calling that on the trader a discord the sort of area of large resting liquidity overhead Right When you see that kind of large resting liquidity overhead and it's it's massive I mean we're talking about hundreds and hundreds and hundreds of contracts cumulative cumulatively over a thousand and price gets up to it and runs away You got to kind of go back to that auction theory, right? And the auction theory is when you have an excess of supply If the burden of proof is on the buyer they were not able to show that demand and we retreated from that level pretty Significantly you can go back on my Twitter feed if you're interested You can find me on Twitter looking for mayhem for markets. That's mayhem number for markets same handle on YouTube You can also check out my work at trader aid comm or macro visor comm trader aides where we focus on short to intermediate term Trading education and tools and macro visors where we focus on the big picture longer term swing trades and investment opportunities I Also built my advanced spx options visualizer to better show how those full-chain spx options Impact the price of futures the spx options complex trades 1.2 trillion of notional every single day The entire equity futures market trades 400 billion of notional every day So you can see how the tail may be wagging the dog a little bit here And that's one of the reasons I built that tool because we look at full-chain options action positioning It has a magnetic effect So let's talk a little bit about what's going on around the world Global stocks are nearing oversold territory amid this sell-off not quite there yet But I thought this was interesting because we also have to contextualize this data Even though we have seen some selling pressure We still have positioning very very stretched to the long side and this is systematic positioning So this is looking CTAs risk parity vol control funds But when you zoom out and you look at other measures of positioning or when you look at aggregates of sentiment You see similarly stretched measures that is to say that we could get a pop today We could get a bit of a bounce back in equity markets today But I don't know that this corrective pressure is over and the reason I say that is because I'm really paying attention to what the rates Market is telling us bonds are falling out of bed. The tenure is well above 4.5% That was my line in the sand that I mentioned on March 1st as an area to watch Because if we start to push above that rate I belay I believed and I I've unfortunately been right for equity longs But I believe that was the point where we would start to see pressure Increase because rates would start to matter again and indeed we are seeing that pressure increase rates are Mattering again, so I think that we have to pay attention to several key factors here The reacceleration of inflation is a big part of this that's driving rates higher It's changing expectations from the Fed. That's why Fed speakers have become interesting to listen to again We've got what like for Fed speakers today, including the big man himself pal. I think at 115. It's gonna be a pretty interesting day I don't know that his speaking is gonna be too much on monetary policy outcomes. It may be more of a theoretical or or You know more of a discussion between two people that are talking about broad strokes So I don't know we'll get a lot of clues, but there'll certainly probably be some clues in that But nevertheless, it's a day full of Fed speakers. We also have some macro data that we're gonna want to digest on the calendar So we'll get to that we've got Industrial production at 915 with capacity capacity utilization We've got manufacturing production coming at the same time and then we've got the feds Williams speech. We've got Powell speaking at 115 a p.m. As well, and then we have a bit more Bit more speeches going on, you know based on what I was looking at we have a couple of others on deck as well including The Bank of Canada, he'll be interacting with Powell Bank of Canada Governor Macklin will be interacting with Powell during that 115 event so be an interesting day Now let's take a look at some of these charts here First we have the S&P 500 futures bouncing right off the top of the itchimoku cloud here. This is kind of important to me This is a wall a volume weighted cloud. This is just not not just the standard cloud So the reason that matters is that it's actually taking into consideration Where flows have been where positioning has been and we're just getting to the point Or scratching the surface of where some of the the earlier lungs may be starting to come under pressure here That is that top of the cloud. I suspect we could see a bit of a bounce from that level pre-market We already are we'll have to see how that holds however again as I've said every time I've been on I like to look at the 20 minute opening range So I kind of clean my mental slate and focus a lot on that to define whether or not we're gonna get a trend and what kind of You know what kind of volatility we might see with that that is to say the size of the opening range May tell us just how big the move or the trend could be So for now, I'm looking at the markets cautiously constructively after two trading days of pretty brutal selling including yesterday's violent reversal We may see a small reprieve that doesn't mean it's over Bears are very much in control when we look at the momentum on this chart We could see the uptrends been broken the EMA 21 has been broken, you know pretty decisively and yesterday the 50-day Moving average not on screen was also broken to the downside on both the S&P and the Nasdaq So I still think sellers from a momentum perspective on an intermediate term basis have control here But I do think that you know with where things are a little bit of a bounce Tuesday tends to be one of the more bullish days of the week As well wouldn't be unheard of here. So let's look at some of the key levels one of them that I'm looking at that's just right below us here is 5102 25 on yes, and then 5081. I think those two levels are pretty key We can see that those have been areas where buyers have found some appetite to come back in and We can also see that that has been an area of volume profile where there's been interest So these are two areas that I would want to see hold If we don't and we actually take out that lower level that I think all bets are off that this is going to be a recovery day That's to say we could have a day where we re-explore yesterday's low and still bounce But we have to hold that low now if we are to bounce Here are some of the levels that I'm interested in Over the intermediate like one week plus term right overhead. We've got 51 34 51 50 975 and 51 68 if we zoom in on a four-hour chart I've broken this down a little bit more for what we could expect intraday. So we've got 51 22 50 51 45 25 5166 25 and 5207 25 Those would be the sort of extensions that I would expect if we have an uptrend day I expect a modest bounce. I don't expect to anything too extraordinary today You know, there's there's a lot of Supportive flows in op-ex week that are a bit diminished right now because the skew which we'll talk about momentarily is a bit subdued So that's why I'm a little bit more guarded. We also have those buyback flows that have been one of the most important areas where Bids have come into the market. That's on pause. We're in that buyback blackout period as we're basically in peak earning season So we have some of those important flows kind of, you know On the sidelines or subdued as the cases with Vanna and Charm flows And then we also have some of these positioning levels showing that they're so extended that there aren't really a lot left to buy In terms of all control risk parity CTA's Managed money, you know, a lot of folks are already very long here So let's look at some of the key options levels to S&P 500 on the cash index We're looking at 5105 thousand is key levels based on full-chain positioning. Now. We are in negative gamma territory We flipped pretty deeply into negative gamma territory as we closed below 5190 right that gamma flip level is 5187 now SPX spot 5062 as of yesterday's closed pre-market implied 5069 40 Now that tells us that dealer dynamics have changed a bit right as we get into negative gamma territory That suggests that dips will be sold rips will be bought. That's a volatility Exacerbator I don't mean implied vol although we've seen the Vic spike. We're talking about more about intraday realized volatility It could be a little bit more amplified in this environment another thing I've noticed is resting liquidity has shrunk a bit We're not seeing the same level of interest expressed in total order book liquidity at least as of yesterday We'll see what it looks like today when we dive into bookmap. I did mention skew here is skew It's come up a bit yesterday, but it's still pretty subdued compared to positioning So this tells us that in this environment those put decay flows right as people have their hedges lose value market makers reduce Their exposure so if you're a market maker and you're selling SPX puts you've got a hedge that by shorting a Vehicle that's similar most of the time the S&P futures Well when those puts lose value as time decay happens, you know, you're going to be Basically reducing your exposure to those puts now we've had some things happen that have changed those dynamics One is those puts haven't lost that much value because the markets come down the second is that skew is relatively subdued So there isn't as much exposure change to happen So those supportive flows may be a little bit diminished they tend to happen most in the first and last hour of trading Okay So we'll see how that goes as we cover the market this morning One thing I found interesting as we shift over to the NASDAQ I like to look at NASDAQ new highs and excess of new lows or vice versa And yesterday was a vice versa day with new lows and excess of new highs by 302 That's the worst that we've seen since October of 2023 and it signals a bit of a shift That is to say that things were starting to look more constructive in February of this year in December of last year And even a little bit in later March, but now we flip the other way We do see a meaningful deterioration in breadth of the NASDAQ A lot of tech stocks are having a really hard time here as rates rise A lot of these companies in the NASDAQ are more rates sensitive And that means that so goes the 10 year note So goes the NASDAQ we're back at the point where that negative correlation between rates and equities is on the rise That is to say rates matter again So let's take a quick look at the NASDAQ This is also at a really important level that I would not be too surprised to see a bit of a bounce from So we're going to be taking a look at that today Obviously, we'll be looking at the 20 minute opening range in the s&p and the NASDAQ to get a better sense But just my gut looking at how much we've sold. I think we could get a tepid bounce nothing too big And we'll see how that plays out during the course of today You know, I kind of enter the day with a blank slate I let the price action tell me where the market wants to go But I like to zoom out and look at some of these bigger picture charts to at least get a sense as to where we've been going into today Next chart I have to share as I promise the 10 year note is showing us some signs of well Breaking down I know there's been repeated calls to you know, sort of buy the dip in bonds or or in this case notes I'm just a little bit leery of that all the momentum factors that I pay attention to for this suggests that there's further downside ahead Of course, we could have a little bit of a reprieve on a day like today That wouldn't surprise me although right now we're seeing them continue to sell down as well as the 30s But I do think that last week gave us some very key indications A CPI came in hotter than expected Rates continued to push up the 10 year went above that key level of four and a half percent pretty meaningfully B. I had that key 10 year auction on CPI day and it was a degrade auction. It was nasty I was not a fan of it. We saw rates continue to push higher The only thing that gave rates a real bid last week that is to say help them to move lower Was the geopolitical tensions in that flight to safety play and some of that has ameliorated That is to say that people are not as concerned about imminent escalation. The tensions are still boiling But we don't have that imminent sense right now. So we still see those Futures prices moving lower rates moving higher. I think that's a key theme for this year Some have said the 40 year bond bull market is over. I started saying that in 2022. I stand by it. I don't think that this cycle of Rates going lower and lower and lower is something that we can really look forward to in an era where inflation is stubborn Where the economy is stronger than expected and even though the fed says they're going to cut and they may I believe that'll be a policy mistake and they may even have to reverse that sooner than later I also don't think that cut's going to come as early as folks were expecting Remember we started this last year. I should say we started Looking at this year late last year with the idea there'd be seven cuts this year Now fed funds futures are pricing in one and a half What the first cut most likely in september what a difference several months makes Now one beneficiary of rising rates is the greenback the u.s. Dollar rallying in this uptrend channel It still looks constructive to me. I still think it has room higher, which means i'm bearish of the euro T-row price also came out yesterday and says the yen probably has 10 further to fall So there are a lot of reasons to continue to be bullish of the dollar here in my opinion Particularly as rates are on the rise And we can see the bloomberg dollar index had its best five day run since february of 2023 recently Just showing you the kind of interest the strength that's coming back to the dollar I know a lot of folks are bearish on the dollar But the problem is to be bearish on the dollar you have to basically be bullish on the euro, which is 70% of the us dollar index There's no reason to be bullish on the euro Lagarde has made it clear she's going to cut before the fed They never got rates as high as the fed The interest rate differential the economic differentials everything suggests that the euro is still overpriced here in my opinion Now let's take a look at everyone's favorite commodity that would be crude oil And this is what i've been bullish on for quite a while as you guys remember watching my streams I've been saying i'm constructive on crude. I like the energy stocks. I like the energy stocks a lot better than oil here I think oil is doing what it needs to do. It's consolidating It's taking a breather after a heck of a run I mean look at where we were and look at where we are right we started this run In the 70s like very low 70s was when you started to see signs of a higher low being put in And now we're all the way in the mid 80s. That's a pretty big build and this was you know, this started at a time where the consensus was oil's going to 50 or 60 and you know the um Global economy is going to slow down such that maybe we'll even see the 40s in oil and all this and you know I still maintain this idea that there is supply scarcity demand is continuing to build And I don't think that the run oil is quite over yet And if geopolitical tensions in the Middle East continue to rise That run could move quite a bit farther from here into the low hundreds to mid hundreds So i'm still constructive on oil, but I like energy companies better I've shared a lot of those names on macro visor with our members, but you know just zooming out to the big picture xle xop look pretty good too So I encourage you to follow my work. We're going to dive right into book map But before we do you can follow my posts on twitter and my videos on youtube at mayhem four markets as mayhem number four markets My trading idea idea is coaching if you want to learn more about how I approach the market improve your consistency as a trader And otherwise and tools can be found at trader aid.com We also have an awesome discord community And the spx options visualizer that you'll be seeing in not too long is now available You can visit trader aid.com slash spx to learn more or pick up a copy for your book map You do need book map and it is specifically built for dx feed or rhythmic on the s and p 500 futures contract spy Triple q other functionality coming soon as well as the mag 7 i'll announce that when it's out My long-term trading and investment ideas research and institutional consulting services are available at macro visor.com In fact, we just released our quarter two outlook. It's free Check it out. It's on you. It's on our youtube. It's also on our website Highly recommend giving it a watch if you're interested in some longer term investing ideas And I live stream regularly including for book map every tuesday at 9 a.m. Eastern. So be sure to join me every week here So we're going to close out of this presentation and we're going to go right into book map here So let's dive in Pre-market. We're starting to see some of those earlier gains being given back here. We're going to zoom out just a little further Looking a little bit Kind of microstructure double toppy here. I know some folks aren't a big fan of that But you know you got to call it as you see it. We do see some selling pressure Increasing you can see that by the size of these delta bubbles That's one of the beauties of this system is the bubbles are giving you flow information that selling pressure Is overwhelming buyers the larger the bubble is so that's one area that I like to keep an eye on I also like to keep an eye on the liquidity levels that are resting that is to say offers and bids that are sitting there Waiting for fills now this order book today is pre-market 46,000 to give you an idea that was similar to what we saw during trading hours yesterday So the order book was not very liquid yesterday. Let's see if it becomes more liquid today I I believe it may as typically when the cash session starts you get about another 5 10 k Um of liquidity in the order book So we'll we'll have to pay attention to that but right now we start we're starting to see that liquidity increase you can see that You know on the book map heat map here much more oranges and reds showing that these levels of resting bids and offers are growing in size Switching over to the nasdaq here. We'll zoom out a little bit Kind of a similar look in the s&p. You've got that potential Micro structure double top pattern. We'll see if it breaks the load to confirm that But you know again, we could still retest yesterday's lows as long as you don't take them out I'd be looking for a rebid there and if we do get that that's where I'd become more constructive particularly if it lines up with that 20 minute opening range and we're starting to see a breakout at the top of that range Russell 2000 Doing its own thing really just rolling over small caps are quite weak rates are on the rise. This is an index that is Very very sensitive to rates by the way Like this is something that's really important to pay attention to Because if you think about it the russell 2000 about 40 percent of the stocks in this index Are unprofitable growth Okay, so they're very sensitive to rates because they're at the mercy of prevailing financial conditions Whether they're you know in revolving credit lines or whether they're trying to You know get a loan from the bank or otherwise And then the other side of it is you've got a fair amount of exposure to regional banks And those regional banks are particularly sensitive to longer duration rates right tens and up Because they have a lot of exposure to that same as well as mortgage back securities and otherwise So what does that tell you tells you over half of the russell is very rate sensitive So when rates rise this index tends to fall a little bit harder than the nasdaq or the s&p Now big tech used to be more rate sensitive than it is now But you do see that a lot of those companies refinance their debt at the covet rate lows And are actually earning net interest margin on their short term cash, right? So they're less rate sensitive than they used to be those mag seven But they're still not poised to do well in an environment of accelerating inflation So if that trend continues, I think that could be an issue and their capex Which is expected to be quite aggressive this year could also cause them to lag a little bit Now let's take a look at the 10 year note futures here. Ooh Yeah, that's not a great look ahead of the market open. Gotta say, you know, this puts some pressure on everything This shows us that rates are rising again on the long end And that tends to be somewhat bearish for equities particularly the russell as we could see on that prior chart So that's another area to kind of pay attention to what's happening in equities and how that could have an impact On other parts of the market particularly these small caps Let's move over to gold gold. Wow. Look at the Recovery there after a little bit of a sell-down. We're getting right back to that level around 2400 Which is just around the highs that we saw yesterday. It really seems like nothing can stop gold's run here I've heard a lot of folks calling for a crash in gold Um, I think that's a little bit much a corrective pause a breather for sure We could totally see that happen would not be, you know out of the usual at all But in terms of seeing gold crash Um, I really don't see any reason why that would happen. You know, I could see It come down 5 or 10 percent and then start to build but we have this multi year breakout happening here It is accelerating. You've got a lot of central banks around the world buying gold You've got investors increasingly Allocating into gold and yet positioning is not that high That is to say if you look at commitment of traders, which is a great way to view commodities You know, because it gives you a really good sense as to where people are large traders and gold are still not very Stretching in their positioning. Let's look at gold's cousin silver silver trading at 2856 here. I think Silver actually has the potential to catch up to gold. Remember gold's making you all time highs It's like 500 higher or 450 or so then it was during its peak in 2011 Silver is still well below its peak of 48 dollars an ounce And I think silver has some room to catch up Industrial demand is improving Investor demand is improving. So I'd be more interested in silver than gold I'd be more interested in the high quality streamers Of both and some of the higher quality miners of both than the metal itself because they tend to outperform If we get into a nice bull market environment like we're in now Let's look at copper Copper doctor copper has broken out of a multi-year range It is declining just a little bit this morning, but I'm still constructive on copper overall I still believe that in the you know months to come in years to come copper prices could be substantially higher Because supplies are deficient Exploration is deficient production is deficient and demand is growing As we need to increase electrical transmission capacity across the world As we have more demand for electronics and other kinds of infrastructure as EVs Even though they're slowing a bit are still a phenomenon and they require an enormous amount of copper I think that the metal and the higher quality miners have some room to go Let's look at crude here crude trading at 86 85 26 here I look at 86 55 or so is a pretty key pivot. I would get quite a bit more bullish Of crude above that level. I'm still constructive But I'm more constructive on the energy stocks than the commodity because I believe they have a lot of room to catch up here And here's the euro Making a little bit of a gain versus the dollar You know just in this pre-market session from its lows, but overall it's still a bit flat on the day I'm bearish of the euro over the intermediate term, but in the short term, it's really going to be a story of dollar and rates We got semis We'll look at these stocks a little bit more after the market opens because there's not a lot of liquidity in them pre-market right now So we're going to circle right back to the s&p as we're just less than one minute from the Market open here And of course folks, if you have any questions, feel free to pop them into the book map discord book map discord the book map youtube my youtube Or on twitter wherever you're watching we're streaming in several places. We're also streaming on twitch So wherever you're watching feel free to ask a question if I don't get to you It's it's just because there's a lot going on but I will do my best to get to everyone's questions and You know try to help out as we navigate the trading day today Should be a fun day And i'm just going to take a look as we open up the markets here where we're opening right now I'm just going to take a look at some of the news and the headlines that are all going on around the world See if there's anything interesting to take note of We did get some interesting uh economic data out of chida which many people greeted with skepticism Where they said their gdp grew faster than expected, but industrial production or retail sales were lower than expected And march housing starts and building permits missed They came in at 1.321 million versus a consensus of 1.483 million falling 14 percent month over month So we're seeing a continued deceleration here. This could put some upward pressure on rents And the reason for that is that the stock available now to rent to people that are looking Is diminishing because the new projects to build multifamily units and homes overall is shrinking This is another reason why lumber is falling as well by the way And now that we're open we are seeing some selling pressure again Those subdued vana and charm flows not really helping to buffer against some of the selling pressure now I wouldn't be too surprised to see a retest of yesterday's low and a rebid That's kind of my base case here looking for overall a bit of a green day But it's going to depend a lot on these first 20 minutes of trading as to what my overall outlook is And also it's going to depend a lot on rates. We also have Powell coming out speaking later today I think around 1 15 p.m. So that should be fun because that could reset expectations a bit again It may not be a whole lot about monetary policy seems to be more of a meeting between him and the head of the bank of Canada But we'll see how that goes Whenever he speaks high frequency trading algorithms that do natural language parsing kind of get overexcited And and we also see the other algorithms that kind of add liquidity to the market shrink during these event volatility catalyst So you can still have wild trading during that event volatility catalyst Let's take a look at the nasdaq and see how our high beta friend is doing similar look as the s and p some distributive pressure here at the open Russell looking comparatively worse. I imagine that has to do with its reaction to rates And the tenure. Wow. Look at all that liquidity. Is this an inverse death cloud below the tenure? Let's see if we get a rebid around these levels. This is a huge amount of resting liquidity Below the 10 year note futures contract here. So, you know, it's really what if you're going back to auction theory You would say, wow, that's a lot of demand The burden of proof is now on the sellers to say that to demonstrate I should say that they have the supply necessary to fulfill all that demand If they do not typically prices run the other way Gold continuing to pop here Just uh, trading right around 2400. I think that's a pretty key area to watch That was an area where we did see a little bit of resistance come in Overall though, the precious metal is showing impressive resilience here as both nominal and real rates push higher and it continues to gain Silver a little bit of selling pressure here at the open. I imagine we see similar Oh, no copper a little bit of the opposite actually I was going to say imagine we kind of see similar with copper, but not quite pretty stable to up crude also showing similar just pushing higher here after the open And the euro well doing euro things just slipping a bit here overall Let's take a look at the semis here now that we're open We'll zoom into that microstructure just a little bit. They really didn't even start trading much until 931. How about that? But I like watching this smh ETF because it has a lot of liquidity It gives you a little bit more of a sense as to where there's interest. So right now It's just consolidating Apple had a bit of a sell pre-market here, but it looks like it's getting rebid just a little bit But overall a bit of a consolidation sort of like semis Amazon oof seeing some selling pressure on that one Let's zoom in just a little bit more took out that resting bid Got a pretty big resting bid down here at 182. However So we'll be paying attention to that Amazon has this huge ascending wedge pattern I posted this on twitter yesterday Often as a case those patterns don't resolve too too terribly well over the intermediate term So we'll see how it goes for this company that just recently made an all-time high Google getting a nice bid out of the open talk about divergence This one's been a really interesting one to watch I do think management and google has kind of Lost their touch. I'm not a big fan of their current CEO, but overall we can't argue with price action It google has recently made all-time highs and it's staged a pretty good recovery after when we identified It's uh, it's bounce off of a key level right that key level bounce that we saw I want to say it was early last month has led the stock to continue pushing higher Meta surge out of the open just absolutely taking out that 502 and 500 overhead liquidity And uh, you know rising just about four and a half dollars in the first couple minutes of trading here So a pretty big move Microsoft looking pretty choppy to down out of the open And everyone's favorite stock to love or hate depending on what camp you're in I just like watching it Nvidia All right, this one's been the subject of so many different rumors that everyone was calling it a giant fraud I had published some research with my partner I should illustrate that all the allegations of accounting funny business were nonsensical Way way earlier that was last year Before the rally really went hyperbolic And yeah, is it getting a little ahead of itself given that Nvidia's sales growth is set to slow materially this year? Probably but is it a giant Ponzi scheme or a fraud set to implode? No, is it also going to turn into the next three trillion dollar company in the next month? Probably not. Let's let's measure our expectations on both sides of the extremes here And tesla. Oh god oof oof That is my only reaction to the stocks price action lately is oof It just handily took out that enormous resting bid at 155 where there's 265,000 on the bid That's telling you sellers still have what it takes to push this thing lower lots of problems at this company They're firing 10% of their workforce key executives have stepped down The idea of a cheaper ev to compete with some of the chinese manufacturers apparently being pulled And rumors of a very unlikely to come to fruition robo taxi have been circulated by the company's ceo Suggesting that could happen as early as august even though full self-driving is nowhere near ready Now i'm going to see if I can add bitcoin in here. Give me a second And it looks like it's it is having some issues with that feed I'm going to check back on that in just a few minutes Because it is pulling the historical data and sometimes because the data feed is coming out of asia My firewall gets a little grumpy with it. So i'll check on that in just a little bit But we do see the s&p continuing to sell down lower here at the open It's going to pull up some of my charts on another screen here as I watch this price action We're back to that first key level support, right? Just kind of starting to push below it that was 0 to 25 we're at 50 98 now The next level that I'd be watching pretty closely to see if it gets rebid would be 50 81 that is quite a bit lower And selling pressure just resuming right out of the gate similar look with the nasdaq here Taking out those uh those cash open lows now on the nasdaq and the s&p Russell is let's see. Let's zoom in on the rustle Not quite taking out those lows yet, but seems like it's about to do it any there you go And the market on both on balance um Market on open imbalance, I should say was 2 million to the sell side. I'm sorry 2 million to the buy side Kind of tells you those numbers don't really mean a whole lot I don't pay attention to the market on open or market on closed numbers that much Because they don't tend to give you any real Advanced clue about what's about to happen. So, you know, I like to look at them, but I don't pay much attention I look at them only because sort of like moving averages lots of other people look at them Let's take a look at the tenure oof. So remember we talked about that that death cloud and whether or not that inverse death cloud I should say was going to be uh absorbed or not. Well, so far sellers are absorbing That resting bid that is a somewhat bearish sign here for the tenure note because it's telling you there's plenty of supply Remember the onus of proof was on the sellers while they're telling you They've got what it takes to push this thing lower. They've got the supply. Okay Gold dropping here a bit as rates rise Quite a volatile commodity. In fact, gold's volatility per annum is about triple versus its average gains So it is a volatility machine Silver kind of a similar look there dropped but now starting to pop and then giving a little bit of that back Just trading back to the point of control Copper slipping a little bit as well Crude oil also coming off its highs but finding support at that point of control I really love watching the point of control and vwap. I think that they make a big difference to interday trading It can give you a good sense just within seconds of looking at your screen as to what's happening in the market Let's flip back over to the s&p here I just really want to watch some of this Cash open action here We're going to just look at the screen from the cash open to the present here as we start to establish that 20 minute opening range Paul asks how does the market rally with the 10 year at 4.67 percent? Well, Paul doesn't seem like the market wants to rally my only idea that maybe we get a pop today It was based on the notion that we've got some aggressive selling We've come down to some key levels here. Maybe we get a rebid there I don't think that the selling pressure for the intermediate term is necessarily going to abate But you know in just like in a downtrend you have corrective pauses in an uptrend you have corrective pauses I would just be looking for a little more of that than saying that the selling is necessarily over I I think quite frankly we're entering the beginning of a correction Over the intermediate term and that correction could bring us down to about 4,800 spx Which would be a great buying opportunity because it would probably be a period of time Where you see a rotation out of the mag 7 and into older economy stocks that i've been bullish on They're talking about industrials metals and mining materials Um Also looking at other sectors like aerospace and defense and utilities. Those are areas and energy, of course How could I forget about that that if we had a bit of a breather and we started to see a rotation into them And rotations typically happen during selldown So you look for relative strength versus relative weakness to isolate where that might be happening Those are areas that I'd want to buy into Once we see the smoke clear. So i'm still constructive, but i am Very cautious in the near term I think that with the cessation of buyback support with subdued Vana and charm flows rates rising inflationary concerns Coming back to the forefront, you know a lot of the reasons that this rally happened have to be reconsidered So folks if you have any questions for me while we are on the stream, please don't hesitate to ask always happy to help And this is getting pretty interesting here We still see a market that is under pressure buyers have not been able to do much other than sort of Try to absorb some of the selling pressure every time they have the sellers have come back in And they're more aggressive and looks like they're about to push us to new lows on the spools here Again, if we slip below 50 81 I think all bets are off that we're going to get a decent rebid today And in terms of the broader market structure, you could say that we are no longer in an uptrend in the NASDAQ Or the s&p with the Dow and the Russell having lost it earlier Someone asks in the twitter chat. What do you think about Dell short term and long term? So That's a great question in terms of short term. I have not looked at their chart recently. Let me take a quick look at it So short term looks a little bit extended. It's got this big gap It may potentially need to fill as well all the way down to say 94 64 So, uh, I would say short term a little cautious here seeing it lose the EMA 21 And uh, longer term, I would say that I like the company. I think that actually Dell could stage a pretty good competitive, um encroachment on SMCI Because unlike Nvidia who makes their own patented technology that is that is somewhat unique Especially when it comes to CUDA and how they've locked people into that Nvidia ecology SMCI does not enjoy the same advantage They are a hardware integrator not a semiconductor company, right? So Dell can compete with that HP enterprise can compete with that all kinds of hardware integrators can make modular GPU accelerator technology that can compete with the likes of SMCI at the data center scale So I think that's where Dell looks good is that, you know, they have I think pretty good management of the computer makers out there. Dell is really my favorite And in terms of their encroachment into the data center space I think they're starting to realize That they were a little behind and now they're making that full push forward, which is one of the reasons we've seen the stock You know have such a big rally basically doubling from its bottom in december of last year But I think that also we have to look at that price action and say boy There's a fair amount of that optimism being priced in so a corrective pause that brings us down Maybe 10 15 percent and and if we start to see a rebase around that level that we talked about maybe around You know like 94 and change that would have me looking at Dell and potentially wanting to to nibble at it But over the short term I'd be cautious here because I think it looks a little bit extended Going back to the futures here s and p making new lows here We are just three minutes away from being able to establish that 20 minute opening range I'm going to just bring up a chart on screen that we were looking at earlier to emphasize The importance of this area So just bear with me a moment. All right. So here's that chart. I was sharing earlier on s and p And why I think 50 81 is kind of an important level. We're not very far above it It's about seven and a half handles seven handles six and a half handles So, you know, if this level gets taken out This thing starts to look a lot heavier and that idea of a bounce today goes right out the window My idea is that we get rebid here and maybe we get a bit of a tepid bounce and retrace from some of yesterday's selling But we have to hold that level if we If we push below it and it's not just a look below, but we actually build acceptance then all that idea of a sort of You know turn around tuesday albeit temporary goes out the window Let's check in on tenure note futures real quick here too. So, okay So they did absorb a decent chunk of that inverse death cloud But now starting to see buyers come back in so did sellers lack sufficient supply to take us all the way through We'll see how this plays out. But right now it's starting to look a little bit more like that Let's take a look at the nasdaq here nasdaq also pushed to new cash session lows just seeing a little bit of a reprieve from there Russell continues to look the worst of the pack here not terribly surprising given what's happening with interest rates So we're hearing some comments from christine legard that the ecb will cut rates soon in her words And I think that tells us that you know the the euro again has more reasons to weaken versus the dollar So I just pop the euro on screen to see if we get any kind of reaction just a little bit of selling pressure in the euro here Gold seems sanguine about that the uh The comments by christine legard also said they're paying very close attention to oil here So also just bringing oil back up on screen. We had a nice little bottom right at that point of control We see that rebid coming in up about 30 cents from that low And now we have that 20 minute opening range on the s and p So we can kind of define that here And I'm going to zoom into it on my own chart as well just on my other screen And the ecb reiterating how important oil prices are to their policy trajectory Which is pretty interesting since central bank policy doesn't typically have a big effect on oil prices But oil prices tend to have a pretty big effect on inflation So we've got the top of that opening range here just at about 50 109 the bottom of that opening range There's about 50 87 So that's just a 22 handle opening range not terribly large Suggest this may not be a very exciting trading day But you know anything can happen when you've got so many fed speakers So I'll be too careful about leaning into that. We don't have that much liquidity on the book though That's a little disappointing. You can see that there's only 47 000 contracts on the order book I like to see this, you know 55 to 60 and I feel a little more confident. So on a day like today if I'm placing any intraday trades I'm going to be using smaller position sizes and wider stops Because it's not a very liquid order book and we're in negative gamma territory Got a couple of other questions coming in as we get closer to wrapping up Just have about six minutes left on the stream. Let me get to these Do you look at options data and does it have much of an effect on price? Great question. Gives me an opportunity to talk a little bit about exactly that Yes, I look at options data quite a bit On the right column here, you have the spx options visualizer And we can see the options from today the trading activity that is happening this morning from cboe on spx Translated to es level. So this is a plugin I built for book map specifically for the es contract And it shows that where options flows and positioning are the gamma levels The the hot call and a warm call. This is the Most active strike on the chain on calls the second most active strike on the chain on calls Most active put second most active put the star telling you that there are more calls being bought than puts and that the hot call At that moment was the more active Strike on the chain now that's moving over to the hot put so to answer your question Yes, I not only watch options and believe they have a tremendous impact But I've actually built tools specifically to monitor that impact so that I can understand better and trade with it And so I would say that if you contextualize it based on flow alone 1.2 trillion of notional changes hands and spx index options every day If you look at the entire equity futures complex, it's 400 billion of notional every day So the tail really is wagging the dog It's not just zero dte's though. It's all chain It's really about watching the full s and p 500 options chain to understand where there are levels of interest where there's potential resistance and support and where there's potential magnets From really large levels of exposure and also areas of interest being expressed by active flows So that's why I built this tool. I find it valuable I actually built it just for myself Then I put it on the trader a discord and then eventually I made it available for sale on the book map marketplace because I found it was pretty darn useful Given how much of an impact options have on trading conditions So another question. Um, good morning. Would you Say that i w m is giving a clear signal of the market strength or weakness from spy Um, so I think what what small caps are showing us here And here's the russell futures and we'll just zoom this out a little bit so we can see today's price action, which is pretty horrifying Uh, I would say that small caps are giving us a message that risk appetites are diminishing Rates that that that continue to rise are putting pressure on small caps because about 50 percent of the russell is very sensitive to rates, right About 40 percent of the russell doesn't make any money So they're having to raise debt. They're having to do dilutive share offerings or otherwise they're kind of um At the mercy of prevailing financial conditions. So as financial conditions tighten a bit the russell tends to lag And I think that's more what the russell is telling us. It's telling us that rates are rising risk appetites are diminishing And you know, people are becoming a little bit more cautious about where they want to park their money right now Let me know if that helps Slowdown on the book map discord server asks what information from the stop and iceberg detector do you find actionable? Are you only paying attention to large icebergs and stops etc? Great question. So let's go over to the the s and p contract here because You know tend to see a little bit more of that activity here overall So I do have a few ways that I tend to look at stops and icebergs I will say we we are seeing a little bit of a rebid and s and p and some interest growing above here and resting liquidity So that is interesting. We're also pushing above the point of control. So back to stops and icebergs I do look at them as being contextually important Like if we see iceberg flows of you know, a thousand lots here a thousand lots there on the buy side There and and especially if they're absorbing a stop run where you're seeing longs getting stopped out That tells me we might be on the verge of an exhausted exhaustion driven reversal, right? So there's context from where we can get a sense as to Um, the divergence, right stops tend to be triggered by more Short-term traders smaller traders people that are scalping when you see those exhaustive stop runs and institutions Are the ones buying into those That tells me that potentially we're we're about to see things turn the other way and it can be both dynamics, you know You can have an exhaustive stop run to the upside institutions Also selling into that showing you that there's a potential reversal coming there So I like to look at it from that perspective and I do have them tuned So that I'm only displaying unusually large size on my book map. I don't need all the the data, right? I I'm very much, um Trying to make sure that whatever pops up on screen is meaningful to me Right rather than just like showing every single bit of activity because you know the way I trade this I'm looking for unusual activity from those two areas. I'm looking for exhaustive amounts of stops or Really really powerful levels of absorption through icebergs. So I've trade. I've set it up. I believe it's about a 20 minute sample period with a 10 standard deviation So that it gets rid of a lot of the noise and just helps me focus on more of the signal And then I also have them on the sub chart as you can see with the radials and on the on the graph So let me know if that helps Next time I stream because I'm kind of running out of time now, but next time I stream I'm happy to go more into that A great question from my friend adrian who asks Or you said hey mayhem yesterday you showed what a death cloud pattern looks like on book map Does the opposite apply in the buy side? You know if you see like basically an inverse death cloud of massive amounts of of resting liquidity on the bid side Great question. Yes. It's all about the reaction though, right? So we see a little bit of that playing out In the tenure, right? We had a bit of an inverse death cloud in the tenure here And it absorbed some of it, but now it's starting to reflect higher. So we could say that maybe We're starting to see a bit more of a subdued version of what we had yesterday in the tenure No, but either way for me the death cloud is always sort of like where whether it's a you know above us or inverted below us It's always this idea of okay Now the onus of proof is on the other side So for example on the tenure today if there's a huge amount of resting liquidity below it What that tells me is now the onus of proof is on the sellers to show they have enough supply to push through that If they don't it typically you start to see a reversal So folks it is 10 a.m I've got to wrap it up here really appreciate everyone tuning into this stream If you want to learn more about me follow me on twitter or youtube The name is mayhem for markets. That's my handle mayhem number for markets You could follow my work at trader aid.com for my tools coaching and short-term trading ideas as well as our awesome discord community You can also follow my work at macro visor.com where I focus on the big picture Or macro meets momentum to set up longer term trading opportunities and investment ideas We just put out our quarter two outlook. Check that out. It's free on our youtube and thanks again for everyone tuning in Don't forget to check out book map. You can find it at trader aid.com slash book map Get up to 40 off scroll down to the specials and if you like that spx options visualizer It is available on the book map marketplace. Just visit trader aid.com slash spx. Thanks everyone for tuning in I'll catch you next week Tuesday at 9 a.m. Eastern