Sitting On The Gamma's Edge

[00:00:00]You can't supplant Blake. He's like the unsinkable Molly Brown, right? You just can't, you know.

[00:00:04]>> [laughter] >> But uh but anyway, >> Belly up to the bar, boys.

[00:00:08]>> You what?

[00:00:09]>> I said, "Belly up to the bar, boys."

[00:00:10]That's one of the songs she sings in The Unsinkable Molly Brown.

[00:00:14]>> I haven't seen that for a really long time, but but uh >> Debbie Reynolds.

[00:00:19]>> are called latkes. We serve them here in Chinik.

[00:00:22]>> Well, not not at Schmidty's they're not.

[00:00:24]You got to remember this is not >> right right. This is literally This is the potato This is the potato region.

[00:00:29]Right? I'm like My father-in-law shares stories about how much he got paid to go pick potato bread, you know, get the potatoes and put them in. I'm like Man, I felt I felt like I was paid a lot when I got paid a buck 30 an hour to go uh to go pull chickens out of the chicken farm out of the out of the cage and put them in the cage cuz they wanted to replace them. Going for chicken nuggets or something, I don't know. But uh when I when I found out how much he how much he got paid to go pick potatoes or whatever they call it. But uh I'm like, "Man, that was a nice It was by by the pound by the by the bushel, whatever it was." I can't remember, but Anyway, folks, it's a pleasure to be with you today and to get coming from Idaho Falls and it's one of those things, you know, it's like you have a chance to meet like great people and and I had a you know what a chance to meet my wife's family. It was just like, "Man, I want to be part of this family."

[00:01:13]And and one of those people was her father was was her grandpa. They called him Papa. And uh he he was uh he was like a he was like a fixture in Idaho Falls up here. Didn't grow up here. Um but when you meet someone that's great, I remember the first time meeting and walking into the living room and he's sitting on the couch and and you just see his face light up and just the the welcoming, you know, nature of it. You know, you didn't know that this guy was uh was in the first class inducted into the Ricks Hall of Fame for basketball, you know. I had a chance to go to the SEC and instead decided to stay in Idaho, played for Idaho University of Idaho, got his law degree.

[00:01:49]And there's things that kind of mark greatness and certainly, you know, um excelling in your fields with which you work and stuff as a form of rightness, but but the ability to just be so incredibly you know, passionate about everything, you know, the ability to show compassion for other people and just be so just amazing. And so I don't know when I met him the first time, I'm like, "Holy cow, who is this man?" And and uh and when our church they opened up the uh the family history center in in uh in Salt Lake City, he and and his wife Nana, who was equally just I when I met her, she was you know, succumbing to Alzheimer's, but just you could just see who she was and and they started that and then we have a there's a temple in Idaho Falls for our church and he was the the president of that temple, but uh but it was just so cool. He was just such a great man and it wasn't just because he just excelled at everything he did, but he just was just a servant his whole life and coaching and he wasn't really religious growing up, but but it's one of those things that just he's just accept the calling to just help people and uh but he just and he was serving in the legislature as well and and uh but uh so again, I I I feel like I've had a number of like great women in my life, my wife being one of them, but but sometimes you just meet a man that, you know, you just look at and you're like, "Wow."

[00:03:04]And it just blows you away um in terms of just what they who they are, you know, um >> [laughter] >> I know, but he didn't work as a lawyer um but uh he got his law degree, but he wasn't a lawyer, but uh he actually worked for the government um and walked to work every day in in Idaho Falls, but uh but again, it's just one of those guys that I mean, he helped to you know, raise two of his grandsons that you know, and but uh my I'm staying with his his daughter and and uh but anyway, so but he was just someone that was just just so amazing. And when you meet someone like that, it's it's pretty it's called having character. Yeah, but you know, it's like some people they have character, but it's just you know, you they just you want to follow them, but they're just such an example, right? And that's just, you know, just they're they're not just they don't they're not they just can't lead just by word, but they lead by deed, they lead by, you know, just how they treat people and and he was just one of those guys. And so, he passed away about 10 years ago, but yeah, he was definitely a pillar of the community and and uh but again, but he he got that because of just who he was and his character. I think it's a great comment there, RB.

[00:04:10]So, I thought, "Hey, I'm up here. May as well just talk about Papa."

[00:04:13]>> [laughter] >> Um but man, he was walking every day until the very very end. You know, he took care of his wife as through Alzheimer's and and in their home and uh was just a great man. Anyway, all right, let's get rolling here. What are we going to talk about today? Uh there are stuff happening. And we've talked about the Greeks game plan all week. I mean, yesterday uh gamma's edge, we were on the gamma's edge again.

[00:04:34]Um the bulls did not deliver on Monday uh on the gap over the weekend. We're going to talk risk ratios. Are gold and utilities telling us something? So, we'll look at those ratios to see are we seeing any sort of flip or change? And hedges are being added today. 50,000 puts bottom one print on the spy.

[00:04:50]50,000 in DRAM, 10,000 in socks. I mean, people are taking hedges against a pullback in the market and specifically technology. So, we'll kind of look at those. Um >> [laughter] >> BSS, Smitty's like suspiciously Elmer's in Oregon. You know, uh I'll just comment this in Oregon. I lived there for 2 years. Um did a mission up there for my church, but uh Bend, Oregon. Um they had the best Chinese food ever.

[00:05:18]Szechuan chicken, I mean, just great. Um in Aloha, Oregon.

[00:05:25]Man, we had we had Silver Dollar Pizza.

[00:05:27]I looked about it looked about 5 years ago. Not there anymore. I lived across the street at $2 pizza buffet.

[00:05:34]Um but uh I really loved Bend. I really loved Astoria.

[00:05:38]Um Astoria was great. Yeah, there's great food in Bend, but uh it was but it was Chan's. And man, you went in there, it was a $3.99 lunch buffet. You know, you got you got your you got your main, you got your side rice, you got an egg roll, you got soup. $3.99. And but it was a great great value at that point.

[00:05:57]But we went there a lot. But but anyway, so Jeffrey likes Bend. Yeah. So we'd we'd we'd we'd on on our on our off day, we'd have people drop us off up the canyon.

[00:06:09]We'd ride our bikes down. It was just you know, mountain biking culture. My cousin moved there for a for a little while. But I'm sure it's a lot more yuppier today than than not. But Steve lived in Beaverton. Uh so yeah, so Beaverton. I never lived in Beaverton. I lived in Aloha and Hillsboro uh for just you know, about 4 months each.

[00:06:28]Uh well, 3 months in Aloha, 4 months in Hillsboro. But but Astoria, I love being on the coast. Love crossing the bay, going to Warrenton. I did get an accident on the bridge going to Warrenton. Everything stopped and and this this truck had this long hitch.

[00:06:45]And I I can't stop just before I hit the truck, but I hit the hitch and it went just right through the radiator. But yeah, Nike headquarters.

[00:06:54]So you know, it's like I never Avia was there as well. So so I got some Nike shoes one time cuz you know, I knew people that worked there. I got some Avia shoes one time cuz we knew somebody that worked there. But yeah, back in back in the '90s, man, it was just uh that area was such a Oregon was such a phenomenal place to live back in the '90s. I I We have some people that move there now in Washington. Things have changed a lot.

[00:07:20]And not necessarily for the better, unfortunately. But uh but we had a I have a neighbor that just came back. He just moved back from from kind of central Oregon kind of by you know, by Eugene. But sort of you know, kind of was a lot in the a little more west.

[00:07:34]He had a fantastic time, great fishing.

[00:07:37]Uh ready might be trying to outlaw fishing there. But he had loved but loved the fishing. And uh that's something I never did. But we'd hear scourging stories on the on the Columbia, but one of the amazing drives in the world is you cross over to Long Beach and uh you go along the coast to Longview. Such an incredible drive. So, anyway.

[00:07:55]Uh Ed Meitzen was in Idaho Falls in 1973. Sure is a lot smaller then. Again, it's a it's it's a it's grown tremendously in and depending on when the baseball games are, you may want to try to go to go up to uh Yellowstone.

[00:08:09]But uh Poor Laura, it's still amazing place to live. I'm I hope it is. Yeah, we used to we used to go down there, try to go to uh the uh shoot the uh oh shoot, what was it called? Was it something underground? But they had Chucks or not Chucks, they had a um a Doc Martens.

[00:08:24]>> [laughter] >> Uh Ah, Brazilian rainforest in a few months. Yes, I got a I got a name, I've coached him for many years and his father when I coached in eighth grade, we're coaching him, his father died.

[00:08:36]And he was a good guy and um but uh he's about to go to South Africa.

[00:08:40]We're going to see his uh farewell on Sunday, but uh anyway, Betty, it's amazing. My my son's going to be coming back from Taiwan here in in August.

[00:08:47]August 6th, we got his flight plans and we're super excited for him and Anyway, saw the eclipse in Idaho Falls.

[00:08:53]Yeah, we got it just a sliver, like a lunar sliver, just like a crescent, but it's just a sliver the other day. All right. Uh you know, I could talk forever. You know, it's just one of those things like You want to talk NBA draft? Nope, we don't want to do that. Uh so, don't get me started.

[00:09:09]It's squirrel.

[00:09:10]All right. So, let's take a look at the S&P. Now, we laid out the game plan yesterday um in terms of what was happening in the S&P 500. So, Monday was if you were a bull, you had to be a bit disappointed.

[00:09:22]Why?

[00:09:23]Well, we had this nice gap up, you thought everything was great.

[00:09:28]Wasn't. You know, you thought this was like a cherry, you know, uh cherry cream cheese schnitzel you're going to get in uh the financial district. One of the most amazing pieces of pastry I've ever gotten >> [clears throat] >> I was I had to go I was meeting with the CMT uh um uh chair uh you know CMT leadership uh this is many you know 2000 what 8 17? 2000 it was May of 2017.

[00:09:56]And uh I'm walking through the financial district and I went to this little place and they had this cherry schnitz schnitzel. It was kind of a sliver where they cut it was just filled with like like cheesecake essentially a cherry.

[00:10:08]And if you know me, cherry always goes with cheesecake. Cherry cheesecake is my favorite dessert ever.

[00:10:16]You thought the bulls got that on Monday.

[00:10:19]The chocolate covered halva, again I'll take cream cheese and cherry any single day and all day long. But you thought the bulls were getting that cherry cheesecake schnitzel on Friday.

[00:10:31]Nah. The reality is the bulls did not deliver.

[00:10:35]What the bulls delivered on Friday was nada.

[00:10:39]You saw as many puts traded as calls on on Monday.

[00:10:43]And what did we talk about the failure of that, right? What the bulls needed, what the bulls right now wanted and needed, they needed to see a huge call volume day and they didn't get it. So what happened was what we saw was the puts were just being moved up.

[00:11:00]And so now all of a sudden the structure becomes to where all of a sudden you get a little slip and you start to fall. What happens is those puts that are traded close to the money up here start to move in the money or they start to approach at the money.

[00:11:15]And what happens is the gamma picks up and what we're talking about is a negative G negative gamma structure.

[00:11:23]And so all of a sudden we saw that kind of break a little bit on Tuesday and yesterday we saw it break further. And this is some this was the the slippery slope that we talked about yesterday and when Mac and I when Mac and um Who came up with a the professor Mac came in yesterday I mentioned the fact that look yeah the downside risk we're talking about negative skew.

[00:11:47]The downside risk is elevated. Now as you look at that intraday window yesterday, what do you notice about the levels?

[00:11:56]Okay, what do you notice about the levels? Well, number one you got 750 up here, right?

[00:12:01]>> [snorts] >> We talked about this being a significant node and below 750, what happens? We start to see negative gamma introduced.

[00:12:10]Negative gamma, what does it happen? The dealer has to sell into sell-offs and they buy rallies.

[00:12:17]But the problem is we're up against the wall of positive gamma up here. And in a positive gamma environment, what do they do? They sell the rallies and they buy the dips.

[00:12:27]So all of a sudden we're selling rallies, we're buying dips, we're floating along 750, we're coming up on a Fed statement at 12 buck 12:00 and then we get the press conference at 12:30, yada yada yada. I had a little presentation going here, so I missed it all.

[00:12:43]But looking at it after the fact we talked about breaking 750 and basically forming that lower high.

[00:12:51]We kind of formed a slightly lower high there and we began to break right there down to where?

[00:12:55]It should not have been a mystery.

[00:12:58]We talked about you break 750, we're going to push very very fast to 745 and in fact it took it less than 5 minutes to go from 751 down to 745 and that's where we worked until when?

[00:13:13]Until we broke right there and where are we going to go next?

[00:13:17]It's not a mystery, folks.

[00:13:20]You don't have to apply a single technical indicator here. You know the levels ahead of time. It's 750, it's 7:45, and it's 7:40.

[00:13:30]How in the world can we know that ahead of time?

[00:13:34]How in the world could we have known that oh, 7:45, we're going to go there quick. Oh, we break 7:45, we're going to go to 7:40 quick.

[00:13:41]This has everything to do with gamma structure, right? GEX.

[00:13:45]Gamma exposure. And when you're in a negative gamma regime, this is exactly what happens. We've seen this a number of times over the last few weeks.

[00:13:57]And so when you when you look at this, you understand that wow, these levels have significant power.

[00:14:04]Where we bobbing along today?

[00:14:07]Now, there is a significant print today.

[00:14:10]Uh 2.7 million at 7:00 Well, reported out of sequence there.

[00:14:16]Um but uh 7:47.85, they adjust there to 7:47.87.

[00:14:21]Is it two separate ones? Two you again, whatever, right? I put that in there.

[00:14:25]Now, the thing about this is reported out of sequence.

[00:14:28]Uh there was no 2 million share trade so far today.

[00:14:32]And so you could try to look at yesterday, was there a two point you was there a 2.7 million trade in here?

[00:14:38]Probably not.

[00:14:39]2.7 million right there, for example.

[00:14:41]Nope, 2.5 million.

[00:14:43]So what happens is I I think a lot of times these are what? These are dark pool prints. Yes, it's reported out of sequence cuz they don't have to report it for like 20 24 hours, right? And there's ways around even push it a little longer than that. So the point is that we had a trade. Don't look at the buy. The buy does not matter.

[00:14:58]What we're seeing is that becomes a significant level just by itself.

[00:15:02]Because if somebody's buying 2 million shares, somebody's selling 2 million shares. And if it's in the dark pools, you have to match them up.

[00:15:10]Right? So what that what that says is there's agreement at that level. That level is going to be what?

[00:15:18]Reported just after the open right here, right? So what does that level become?

[00:15:22]It becomes instantly That was what? At uh 9:45, so right about right there, right? 7:45 my time.

[00:15:31]But, the point is out of sequence, probably a dark pool sprint, but the point is 747.85.

[00:15:37]Okay? Now, we got to buy 747.91.

[00:15:41]747.91 is again right around right there again, isn't it?

[00:15:45]We're seeing a number of prints that are popping up here in trade flash.

[00:15:53]Sorry. I'm just coming up right here, just just barely, right? So, this is my time. The 9:50, 9:45. So, just coming in right here. We're seeing a number of prints out of sequence. Again, I would say all these are dark pool prints. The point being is that we're seeing a lot of trade right there. There's significant agreement at 747.85-ish.

[00:16:12]This is going to be resistance below. If we can break through it, it becomes support.

[00:16:16]All right. So, let's take a look at the trade tab here, and we're going to look at today's 0DTE. How did today's structure change? Did it shift at all?

[00:16:24]Well, it's going to shift a little bit every day.

[00:16:26]And the And the question becomes is how did it shift? How did it shape up? Where is our negative gamma region, and where is our positive gamma region? Well, notice right here at 7:45, 28,000, 31,000. So, we have a little bit of negative gamma pocket right here at 7:45.

[00:16:44]7:40, however, 26,000 and 21,000. So, we can see at 7:40 we start to pick up a little bit of positive gamma for today and stabilize around 7:40. So, again, as long as we're above 7:45, right? We could float along here. We got 47,000 at 7:50 and 19,000.

[00:17:03]So, we really start to pick up a lot of positive gamma as we approach 7:50. As we look at 7:56, sorry, 7:55, we got 42,000 and 9,400, right? So, as we get towards 7:50 pushing to 745, and it gets even more intense out here at 760, uh the imbalance is about the same. This is about 20 what uh uh 29,000, 27,000. This one's about about 32, 33.

[00:17:32]We see a lot of positive gamma up here, right? Positive gamma. So, we really start to pick up more intensely as we approach 750, and we have just a lot of positive G up here. Now, what does that mean? It just means that if the market were to rally towards 750, uh we're going to see a lot of resistance. Right?

[00:17:50]They're going to sell the rallies. The closer we get to 750, the more they're going to sell. Right now, we're sitting at 745, though. 745 at this level right here, 28,000 and 31,000. A slightly negative gamma. And what happens this gamma if we break 745?

[00:18:10]Well, look at 740. We got 21,000 over here, 26,000. Again, a little bit of positive positive gamma pocket. It may not be as fast as we get down here. We got 10,000 and 6. A little bit of negative. We're going to start to pick up a little positive gamma as we 740.

[00:18:25]If we lose 740 today, 29 and 1, we start to see some major, major 730. We start to see major, major negative gamma. So, we have a real chance today just kind of floating in here with 740 as our floor of support.

[00:18:44]Uh and again, maybe we stay above 745.

[00:18:47]Again, if we lose 745, it's not as big of a a selling thrust. We lose 740, that becomes big. Okay? So, as we kind of translate what's going on intraday today, again, 745 is the key level, but 740 is the major level today that if we break, we could really, really fall into the abyss here. So, just just so you understand, if we get any late-day sell-off, it may not be as quick to 740, but once we break 740, that's where we could really see some major major sell side activity. And 750 up here, though, 750 is is an area that again it we're going to see they're going to sell these rallies. Again, it gets the the gamma gets really positive gamma gets really intense up here. So, it's going to be really really tough slot tough sledding up to 755.

[00:19:35]But again, lose 745, I'm not sure we're going to see as fast of a sell off to 740. It might just need more grind it out. But we break 740, we really start to pin 740, break that level, uh we might just kind of pin in here, but we break 740, we could really really lose a lot of ground today. So, just be prepared. I think there's a great chance we just kind of just as the day wears on because it's a long weekend, we might just see trade just kind of fizzle today. But this might be a great day to hedge as we're going to talk about, but uh as we kind of break things out to let's say on Monday, and you can try to look at the volume and see how things are kind of shaping out here. We're seeing a lot more calls and puts, but again, 745 and below, we're we're seeing a lot more volume on the put side than the call side, which you'd kind of expect. Again, lose 745, we're going to start to see these other levels start to kick in. Friday, if we look at existing uh next Friday's expiration, not a lot in here. We're going to start to build here as well.

[00:20:32]But you go out to the July, gamma is not very big in July just cuz the amount of time. But again, you you notice the call side, right? 20,011.

[00:20:39]Again, you break 745, then we see the script flipped as we get to 740. So, so again, break 740, oh man, we start to really open the chasm there. But most of that downside below 740 volatility is going to occur because the shorter expiration is not the longer. Okay?

[00:20:57]All right. So, that's our GEX game plan for today. Just realize, hey, as we get to 750, you might take a bearish trade here. Just kind of playing it back into 748, 747. Really, if it's a 750, buy 749, sell a 747. You just need to get to 748-ish. Okay? But, that is a significant level today. We see multiple, multiple prints here. And buys and sells don't matter.

[00:21:22]Uh we're getting some duplicates in here, but we probably just have two.

[00:21:26]But, the idea is that the the buys and sells don't matter. It's the level. Um so, just realize it's not options. This is stock, equity. Equity does not have a bias, buy and sell. It just has a level.

[00:21:38]And so, we have an instantaneous level that's not being reflected in volume profile, by the way.

[00:21:44]And so, as a function, you're not going to be able to see it there. You got to be able to see it by being able to look at here, for example, and picking up on maybe what's going on in the dark pools.

[00:21:52]Cuz about 50, you know, 50-60% sometimes of the volume occurs in dark pools. On an average day, about 40% is. So, um but, that's going to be a significant level. So, if we break it here, look for price to stall out. But, recognize 748 could be a floor of support if we're above it. So, just kind of watch that here. But, this could be a resistance.

[00:22:11]It could be a point to fade. Look at this pulling back to 745 again, as well.

[00:22:15]Um but, a break here 745, I think we're going to grind to 740. We could pin at that level. Break of 740 is where the volatility can of worms starts to open up here.

[00:22:26]All right. So, let's look at our risk ratios.

[00:22:29]Okay? So, again, I mean, you can you can try to apply indicators.

[00:22:35]And and look at kind of a a second, like a a derivative.

[00:22:40]But, in actuality, the option market, it's a derivative market, but it actually has direct effect on the stock price, as we see every single day. More so than anything else you'll look at. Gamma exposure is massive. And now, you can trade intraday and do it. You don't have to have a 225 grand, right?

[00:22:58]All right. Let's take a look at some stuff here. So, let's look at SPY.

[00:23:01]Actually, let's look at our VIX.

[00:23:03]So, this morning our first risk ratio is three-month and one-month VIX and we do a ratio.

[00:23:09]And it's kind of funny, you know, and it's it's not funny, but someone posted this morning talking about VIX futures and they gave an example where the VIX was at 20.

[00:23:20]Uh the front-month VIX contract was at 35, the next contract was like 32, and this was like 30.

[00:23:27]So, we'll just say VX1, VX2, the second expiration, VX3.

[00:23:32]And this is the spot VIX, VIX. Well, this will never happen, right? You'll never have back radiation in the VIX futures and have the spot VIX at 20.

[00:23:41]So, the spot VIX is always if we're in back radiation going to be above the future structure.

[00:23:48]So, just so you know, so somebody on on on X this morning was posting something like this and I commented and I said, "Well, you're never going to see this. The spot VIX is always going to be above that front-month VIX if we're in back radiation." Now, it might be flat and maybe there's a little bit of nuance there, but in this circumstance, that's a pretty decent drop in the VIX futures.

[00:24:09]That 20 VIX is going to be up here about 37, maybe, right? You're you're going to see the spot VIX is going to be above the first front-month VIX futures contract if we're in back radiation.

[00:24:21]Now, if we're a normal kind of a normal structure or contango structure then the VIX will be below the the front-month VIX contract, but this is not it's going to be going up. It's going to be going 35, 38, but they're all that's a really high number, too. So, you know, again, people are trying to learn stuff and share it and on occasion with volatility wise, I tend to comment. This guy actually used this ratio specifically one time, didn't fully understand it. Um and again, as far as I know, I created this ratio 22 years ago. Um so, um so, yeah, I see some people use it a little bit here and there and again I was like, "Oh, you know, I created that." You know, I didn't create the the background. I didn't create the theory behind it. Um I just created the application. Cuz cuz I volatility used to publish the forward premium using VIX futures.

[00:25:13]And that's where I got the levels of 1.2 and 1.

[00:25:16]Um but I but once they stopped doing it, I got tired of trying to calculate it myself, which wasn't hard, but I'm like, "Is there anything that's a good proxy?"

[00:25:23]So, I used my information that I collected and I found that the 3-month VIX or back in the back then it was VXV.

[00:25:31]Um was actually very correlated to the the to the basically the 30 weighted 30-day weighted VIX futures.

[00:25:40]And so, that's how I created this indicator, but the levels came from I volatility and whoever created that in their in their own uh >> [snorts] >> So, let's auto zoom here, but uh the point is in this is that we've kind of posted up here intraday we were above 1.2. We kind of faded back.

[00:25:54]We were above 1.2 there. We faded back.

[00:25:57]Uh we closed above it last back on March 14th. We did it again on the uh the 22nd. We did it again on the 28th. But on intraday basis similar we saw in early May, this was a ball up here.

[00:26:09]Um and again, we did get a 5% correction off of this uh kind of contango market in the VIX.

[00:26:16]And uh we're we're we're intraday touched up here a couple of times and just faded it below it by the end of the day over the course of the last week. So, you notice up here we were pretty steadily above it. We kind of dropped over under there just you know, after the close of the cash session. We're up above that most of the day on Tuesday.

[00:26:35]And yesterday we slipped. Why? Because the VIX rose. And when the VIX rises, this will go down as the VIX falls, this will generally go up as the 3-month VIX rises against the VIX. But we're kind of in this structure where expectations for future volatility are pretty ramped, right? Again, intraday most of two days we're up here. We've pegged this a number of times and we're in a very kind of a volatility regime right now. And everything we talked about on the gamma stuff on Tuesday, I walked through the atomic hedge. And if we look at the S SPY right now, and we'll refer back to that atomic hedge in the analyze tab here. Uh we'll go to risk profile and hopefully it's still in there.

[00:27:16]Uh yeah, so it's still in there. So notice the puts that we walked through were the 7733 strike, right there. We're currently up, you know, we're up here about 740 something, right? So we're kind of above that level right now. But again, we start to drop below 733, uh we start to get down where this this put right here maybe goes to a 55 or 60 delta. You sell the 733 and you move it down to the next 30 delta.

[00:27:42]Right? This call vertical up here, 762 768, that we sold for two talked about selling for 243.

[00:27:49]If we look at where it stands right now, it's about 90. You know, so this is a not in a place yet where you can buy that back. But again, we're using this to pay for that.

[00:27:59]Okay? So right now this the timing of of that was pretty reasonable. Again, we're looking back on Tuesday before we saw the end of day selling there, we were up here.

[00:28:09]Um pretty good timing for a hedge and we'll see. Again, we're looking for a 5% correction from that high at 757 to 10%.

[00:28:17]So I think the idea the likelihood we form a lower low here is pretty pretty easy, pretty significant. Uh I think it's pretty uh pretty reasonable, I guess I should say, that we may get a lower low here. Uh right now we just formed a lower high.

[00:28:30]So is the market currently trending up?

[00:28:32]The answer is of course no.

[00:28:34]What is the trend of the S&P 500?

[00:28:37]So let's walk through trends here.

[00:28:39]Short-term trend, intermediate-term trend, and long-term trend.

[00:28:45]So short-term trend, are we up or down?

[00:28:49]Short-term trend, are we up or down in the S&P 500 right now?

[00:28:56]So, we saw here again, we're kind of seeing that scenario where volatility is indicating maybe a 5 to 10% correction in the S&P 500 with skew being elevated north of 130 as well. But again, are we in a short-term uptrend or downtrend?

[00:29:11]Short-term is days to weeks.

[00:29:15]Well, all we got to do is we just have to look and say, "Okay, well, where's our high day?" Our high day is right there, isn't it?

[00:29:23]Right? So, here is our low day right there. We closed above that high right there, and then what? We put in a high day and we closed below that on Tuesday.

[00:29:32]So, we're in a short-term downtrend, aren't we? And when did that turn? It turned on Tuesday.

[00:29:36]So, the short-term downtrend, we're short-term down, and when did that begin? It began on Tuesday. What about the intermediate term? Now, in theory, if we're looking at intermediate term trends, we're talking 6 weeks to 9 months, where does this 6 weeks come from? It comes from an again in a presumed cycle length of 4 weeks, right?

[00:29:57]So, as we go through cycles, a low to a high to a low, the presumption is this this is the average cycle. It takes about 4 weeks, and most indicators settings are built around that.

[00:30:12]What is the intermediate term trend? Are we up or down?

[00:30:18]What do you think?

[00:30:19]Intermediate term trend, up or down?

[00:30:22]We're going to apply Dow theory here.

[00:30:27]KKTCS says, "For as long as I get full access to a fully functional console."

[00:30:31]Awesome. I'm glad.

[00:30:32]>> [laughter] >> I'm glad it's back. It's down. Right?

[00:30:36]How do you define trend?

[00:30:40]Let's talk about this for a moment. How do you trends?

[00:30:43]If we apply Dow theory, it's what? It's highs and lows, isn't it?

[00:30:48]Oops. Highs and Oh, I can't type here.

[00:30:51]Highs and lows.

[00:30:52]That's how you define trends.

[00:30:55]Right? So, if we say this is a high, that's a change in the short-term trend.

[00:30:59]Well, where do we see the short-term uptrend begin? It began here. Where did the short-term downtrend begin? It began there.

[00:31:06]Right? Where did the prior one before that? Okay, right here. That's your low.

[00:31:09]We closed below the high there. We go back here. There's your high again.

[00:31:13]So, we got we got what?

[00:31:14]High, low, high, low, high.

[00:31:20]We have a lower high and lower low structure. So, the intermediate-term trend is down.

[00:31:26]This isn't hard, is it?

[00:31:28]But, again, I I get it. People will say, "Well, yeah, but what time frame?"

[00:31:32]Right? And every Any time you talk trends, they'll say, "Well, what time frame are you talking about? 6 months?"

[00:31:37]What in the What What does it matter where the price was 6 months ago or a year ago? Right? You get the permabulls out there to say, "Well, yeah, but look where it was at the beginning of the year.

[00:31:48]We started down here and look where we are today. We're up."

[00:31:53]Yeah, that's not technical analysis.

[00:31:55]Give me a break. "Oh, 6 months ago we were here and this is where we are today." That's not technical analysis because where do you cut that off?

[00:32:05]Where do you cut that off? Here's the problem. Okay, well, uptrend. Uptrend.

[00:32:11]Uptrend. Uptrend. Uptrend.

[00:32:15]I can keep going. Uptrend. Uptrend.

[00:32:18]And all of a sudden, well, we got to go from 746. We got to go all the way down to 600 before I can say it's a sideways trend.

[00:32:25]Do you see the risk in that? But, I get it. We've talked about permabulls, right? Permabulls always have to be bullish. Why? Because they don't want to be wrong.

[00:32:34]And they know they're going to be right right a heck of a lot more when they go bullish versus bearish.

[00:32:41]Because why? Well, the market the market expectation of movement is skewed.

[00:32:48]They they know that.

[00:32:51]They play that, but they don't understand skew.

[00:32:54]They know, oh yeah, it goes up more than it goes down. Yes, that's skew.

[00:32:58]But they don't actually understand skew.

[00:33:00]They don't know how to interpret it.

[00:33:01]They don't know how to interpret volatility. They just stay bullish all the time. Why? Because that sells.

[00:33:05]Right? Staying bullish all the time, you're going to be right more often. And being bullish here, yes, you got a decent chance of going Now, if you're watching volatility, if you're looking at that ratio we're just looking at the VIX 3 month VIX ratio, guess what you find out?

[00:33:23]Did the volatility markets tell you that that was a potential low?

[00:33:28]Oh, jeez, I can't even type here.

[00:33:30]Plus VIX. Did the volatility markets tell you that was a potential low? Now, we didn't actually close there. I mean, this is kind of weird.

[00:33:39]I feel like things have shifted here just a little bit. Anyway, did we ever close there? Probably not. But did we get there intraday?

[00:33:45]Do we ever get below I got to go five I got to go Let's go time frame.

[00:33:53]Did we ever get below one? Yeah, we did.

[00:33:56]Tuesday, the 9th, we came close to one there. We were we're below one on Tuesday, the 9th.

[00:34:05]Well, guess what?

[00:34:07]Where's Tuesday, the 9th here if you look at the SPY?

[00:34:10]SPX.

[00:34:13]Where's the 9th? Oh, it's right there.

[00:34:15]Okay.

[00:34:16]So, the point is, if you watch volatility, you had a decent probability that was a low. Now, we kind of broke it there. We held the next day. And you get a tradeable low. This is a tradeable low.

[00:34:26]Right? This is a tradeable. So, normally when you get that signal, we didn't close there.

[00:34:30]Well, you hit tested that entry. Usually within a couple of days you're find a low. The next day well, that was the low day but that we find it you know, off the close.

[00:34:37]And we got a nice rally. That was a tradeable low right there, wasn't it?

[00:34:40]In retrospect, if you saw that intra day down here and said, "Oh, I'm going to sell something in here." It probably worked if the skew was amenable. And you got a nice little nice little rally there. Buy call spread, yeah.

[00:34:50]Okay?

[00:34:51]But it doesn't mean that this is the end of the selling, right? We This could be a lower high. It's exactly what we're seeing right now.

[00:34:57]Okay?

[00:34:58]So, when we look at the volatility markets, they're saying, "Hey, we're Be careful. There's There's a slippery slope here." Now, how much have we shifted? So, we're looking at SPY plus XLU. You know why we're doing this? What we're wanting to see is there a shift and we're going to go a weekly chart.

[00:35:14]And we're going to We're going to go We're looking at a four-week rate of change.

[00:35:17]Do we have the signal this week to sell SPY and buy XLU? So, we start here. We go back 1 2 3 4. Right now, we're virtually identical four weeks ago.

[00:35:31]So, we don't have that signal quite yet.

[00:35:33]We might by the end of the day, by the way.

[00:35:35]And 1 2 3 4, we're basically sitting on top of that same level four weeks ago.

[00:35:41]Next week, we could see that shift.

[00:35:43]And this is just a binary strategy. You either own SPY or you own XLU. That's it.

[00:35:49]And it works pretty dang well. It's been been heavily heavily back tested. Uh in fact, the two guys that they basically took an existing work and put data to it. Uh won the Dow award for the CMT Association for some studies they published. But on a risk-adjusted return basis, it does way better. And so, that's why I showed this. But right now, we're we're knocking on the door right now saying, "I need to sell SPY and buy XLU."

[00:36:14]Okay? We're right there knocking on the door right now. And if we look at the SPY, where's the SPY? We're expected to look at that one. We look at XLU.

[00:36:22]XLU right now, we're saying it's up this week, isn't it? And we're up today. A little bit of movement here and a little bit of drift in the S&P 500. It's going to tell you you got to buy XLU and sell SPY based on that system.

[00:36:37]So, right now we're knocking on the door of saying, "Look, rotate out of the SPY.

[00:36:42]Rotate to XLU." And that's done pretty damn well this year.

[00:36:46]If you've used it.

[00:36:48]We're knocking on the door right now.

[00:36:50]Now, we're looking at the real return of the S&P 500. We're looking at the SPY plus what? GLD.

[00:36:56]Is the S&P gaining real value right now?

[00:37:00]Okay? We saw that big move on Monday.

[00:37:03]Notice what happened. This line ticked down.

[00:37:07]The gold significantly outperformed, almost double at one point, the the the the gain in the S&P 500. The dollar is getting crushed. Things just lifted.

[00:37:16]Okay, let's go back to weekly chart here.

[00:37:19]Four-week rate change? Nope, it is not flipped. Okay?

[00:37:23]So, again, a little bit of bullish movement in gold.

[00:37:27]Another week even.

[00:37:29]Could potentially see this change. 1 2 3 4. So, this ratio basically just has to overtake right there. Oops, wrong way.

[00:37:39]Uh overtake 1.8 and that might happen next week. We'll see.

[00:37:43]I think if there's a pathway for the mar- you know, pathway if the market goes higher um or just kind of stays the same. I think gold has a real chance of outperforming the S&P. Now, today is it doing it? Nope, it's not. It's flat.

[00:37:55]But if the market's going to hold here, uh gold's probably going to outperform.

[00:37:58]Why? Cuz the dollar's going to go down.

[00:38:01]I think the risk is the dollar goes up.

[00:38:03]So, we're saying we're going right back to the trough right now. Looking at that dispersion trade, right? Nvidia suddenly looks pretty good. I talked to you yesterday that might be a a point to buy Nvidia yesterday.

[00:38:14]Uh we're up today just a little bit, but there's there's a slippery slope to the downside here. Okay? Slippery slope to the downside.

[00:38:20]Uh let's look at our next one here.

[00:38:21]We're going to look at uh um XLY plus XLP.

[00:38:28]And what we're doing here is saying are cyclicals outperforming your staples?

[00:38:31]Well, we're going back to this weekly chart and we're going back 4 weeks. 1 2 3 4. Uh at this stage it still says defensive. Right? Staples are still outperforming. If the line's lower than it was 4 weeks ago today, what it tells you is we're the we're seeing a downside bias. Staples still outperforming. Now, we look at today, staples are down 0.17, cyclicals up 1.25% and some of that has to do with the Amazon probably. Amazon's up 2.3% today.

[00:39:03]So again, we saw early in the week on Monday it was Amazon and Nvidia really leading the Magnificent and we're seeing that today, but if this fades, but right now staples are still outperforming cyclicals on a 4-week rate of change basis basis, which is a bearish indication.

[00:39:20]And most of all the strength in cyclicals are right here in Amazon.

[00:39:23]Okay?

[00:39:25]All right, let's look at another one here. Let's go SPHB plus SPLV. So we're looking at this is my short squeeze indicator and as we're looking at it right now, are we favoring high beta or we favoring low beta? Right now we're favoring high beta.

[00:39:40]So you I mean you look over here my this the a lot of these stocks are heavily shorted. Um you're seeing some strength in here. You're seeing some weakness.

[00:39:46]Well, pretty split. High beta is still outperforming.

[00:39:50]Now, you could look at SPHB, look at those names, but we saw a little bit of a break here, but we're still seeing the high beta is still the focus right now. So as we go through these ratios, there's a not we're not fully bearish here, right? We're just at a potential tipping point right now and uh we haven't fully tipped yet. So we still have some work to do on the downside uh to really see this uh see this flip. But understand that the volatility markets are saying, "Look, the risk is the downside right now. As we're looking at TIP to IEF, this ratio, what are you saying? We're moving lower.

[00:40:23]Right? Inflation expectations are falling. They're selling TIP relative to IEF. IEF's been outperforming now for 1 2 3 4 5 consecutive weeks.

[00:40:34]So, all this talk of inflation, they're not bidding TIP right now. They're actually bidding IEF on a relative basis.

[00:40:41]And so we're seeing that and you're like, "Oh man, well what's What are we saying? Well, I mean look right now. I mean TLT's higher.

[00:40:48]Right? They're puts bought. Yes, we may fade here just a little bit, but I I think inevitably what what the Fed said yesterday and what they didn't say, they really lean more hawkish. I know some people are saying, "Oh no, no, they didn't lean hawkish." But they did.

[00:41:02]Right? They're inevitably we're not we're not giving the guidance that we're going to cut.

[00:41:07]Um there are those that want to raise.

[00:41:09]Inflation is somewhat of a concern, even though the markets themselves are saying it's not. But it's not because the Fed's positioning themselves more neutral.

[00:41:18]I mean Powell was a complete disaster.

[00:41:21]And they'll say, "Oh, look what he did for the markets." Yeah, I get it. But at the end of the day, what has he done for markets? He's created a massive bubble.

[00:41:28]Because why? 5 trillion balance sheet expansion. Yes, we paired it back by half.

[00:41:34]He's expanded the balance sheet now for what, you know, for a number of months.

[00:41:39]Worst did it during his first month as well. 40 billion a month still intact. I didn't really see anything in regards to that. We'll have to see. What does the balance sheet do from here?

[00:41:48]But if they start to pull back on the balance sheet expansion and start to allow the which Bostic said he wants to do, he wants to get the balance sheet down. Again, we're starting to normalize policy.

[00:42:00]If he does that. And I think if he normalizes the balance sheet policy, I think it it's going to allow him to potentially cut rates. Cuz right now what's going on in AI is ridiculous.

[00:42:15]Right? I mean, the amount of money that's going in here. And right now, again, the rats are leaving the ship.

[00:42:22]Right? They're trying to take all this risk that's concentrated. And they're trying to what? They're trying to create all these facilities to basically spread the risk out amongst amongst what?

[00:42:35]Funds, you know, against amongst, you know, hedge my hedge funds, you know, sorry, sorry, pension funds, etc. Uh so, Smitty's the Blake and I I'm in Idaho Idaho Falls right now and there's a there's a a diner uh right in the smack smack in the middle of kind of old old town, you know, Idaho Falls right across in the Snake River. And uh but it's a pancake place. It's North West Pancakes and stuff. But but anyway, Smitty's is it's right downtown Idaho Falls. So, uh yeah, it's it's a fun atmosphere.

[00:43:09]It's kind of a Swiss has kind of a Swiss type of feel. I think Smitty's was you know, they're from Switzerland or something.

[00:43:16]The rats are leaving the ship. And again, SpaceX, again, the rats are leaving the ship. And again, you can say what you want about it. SpaceX is going to be a tremendous company. Uh sure, I think it is. I think it already is. But at a valuation of 3 trillion, given its current and but the risk is there. We talked about this shift yesterday or on we saw that talked about the implied volatility on Tuesday, hadn't shifted.

[00:43:39]It shifted yesterday. What happened is the skew flattened out. And you look at the July expiration and you start to see the calls being sold right here out to the 40 deltaish. This 40 delta is starting to come back in a bit.

[00:43:53]Um but we started flattening out, but it became really hard to trade yesterday bullishly. And so, now you're vulnerable for a drop and then again, we're dropping today as well.

[00:44:05]The text does not show up in in in recordings and chat, just so you know.

[00:44:10]Okay?

[00:44:12]You can increase the play speed directly through recordings, but you can if you use just kind of a um fuse a Chrome extension. Like you can get kind of extension to Chrome that will allow you to do that. Uh um Is the app still up? I haven't used the app for so long. The app used to allow you to do that.

[00:44:30]All right, so So the rats leaving the ship. So this gets back to kind of our discussion, right? Um or one of our discussion points, which is what?

[00:44:39]Again, we haven't fully turned here, right? We're about, you know, we got a couple of kind of bearish indications in here.

[00:44:46]But we're just about to tip on a couple um utilities, maybe even today if the S&P fades a bit and utilities stay strong, you might get that signal to rotate to utilities. We'll probably get it next week would be my guess.

[00:44:59]Um again, we're sitting on the gamma's edge. We can see that downside chasm if we break 740 today, but really that structure's still built in. There's just too many puts traded this week relative to calls. It's been very balanced yesterday, a little more puts than calls even.

[00:45:13]But hedges are being added. So I walked through the the atomic hedge on Tuesday.

[00:45:18]I I tried to give you that example and uh just that protect what? To protect equity exposure. There's lots of ways to hedge options exposure, right? Equity exposure requires something bigger and a more blunt instrument. And Tuesday, it was set up pretty well for a atomic hedge. Uh an atomic hedge to be applied.

[00:45:38]So if you want to go back to that recording on Tuesday, um you can watch that application. We did take a peek at it just a minute ago. But the idea being is there's more more hedges being added today.

[00:45:49]So the Block Hunter console, we're back up and running right now. And again, as you look at activity that's happening today, and I'm just going to click on block trades up here. What do you got?

[00:45:58]You got DRAM.

[00:46:00]What is DRAM? Like you can imagine, this is this is memory, right? These are These are again This is tied to that whole AI stuff. Well, what's happening today? Well, click on location right here. Folks, I mean, there is nothing this easy out there.

[00:46:15]Okay, there's nowhere you can go where this is this easy to find. Again, this is this is basically 19 years of work to create something that is easily unmasking these type of block trades.

[00:46:30]Okay? And there's lots of other stuff you can do in here, but there's nothing that out there that does it this easily.

[00:46:36]This quickly, right? I'm going to just go 100 plus, but you'll see right there someone bought and it's bought because why? It's green. It filled near the ask.

[00:46:44]50,000 contracts. You'll see it's highlighted. That's because it created the alert and that's why we see 50,000 there.

[00:46:51]Okay? Now, it's not it's not show there's the location. Oops, wrong one.

[00:46:56]I hover location right there, it'll tell me it was filled at the ask.

[00:47:01]So, what does that mean? I mean, you you consider D-RAM.

[00:47:05]Okay? This is a newer ETF product.

[00:47:08]Came out in April and it's gone from 26 to 77 and today it's up 10% Well, what strike price was traded here?

[00:47:18]So, let's go back. The strike price was traded 60, the delta was about 19. It's out of the money.

[00:47:24]But, it's not that far out of the money.

[00:47:26]Let's go back here.

[00:47:27]August 21st, 60.

[00:47:30]Okay? August 21st, 60.

[00:47:34]Plenty of time for this to come back around. Do they want it to go there?

[00:47:37]Probably not. It could be a trade at 60.

[00:47:41]But, what does this tell us? We just talked about gamma exposure on the S&P 500. The fact that someone bought 50,000 contracts, we know something very succinctly.

[00:47:51]The 60 strike was bought.

[00:47:53]Now, normally we presume that if puts are traded on the S&P they're bought, if calls are traded they're sold.

[00:48:02]But in this case we know specifically they bought 50,000 contracts at 60.

[00:48:09]Now let's take a peek here.

[00:48:11]Now again, this is going to expire but let's look at next week. I mean what kind of interest do we have in here?

[00:48:17]Right? I mean notice on the call side, I mean there's nothing in here.

[00:48:22]Maybe we're building out some at 80, maybe we're closing a lot of that, I don't know.

[00:48:26]But look on the call side for next Friday. I mean there is very very little call volume, call open interest. The open interest kicks in about 773.

[00:48:35]So when we look at next week it looks like we have, you know, we have some support at 73. That's our high open interest node, right? If we pull back here we start to see some drift, you'd probably expect us to start to pull 73.

[00:48:51]Sorry, we again we start to pick up increasingly more positive gamma here as we pull back and again we start to see a stabilize near 73. What happens if we break?

[00:49:02]You look all the way down in the put side and the call side, there's just not many puts for next for for next week's expiration.

[00:49:08]Right?

[00:49:10]But what are we adding here? For July?

[00:49:13]Notice on the call side 10,000. Again, we've we're in a positive gamma structure until where? 70 bucks.

[00:49:22]We start to break 70, we start to pick up some negative gamma here, pretty balanced there. But again, $65 is where that we start to see more negative gamma creep in south of 70.

[00:49:34]Right? That's 29 days out. Let's go 14 days out. What do we got in here?

[00:49:39]There's nothing, right? But if we're looking at DRAM we say okay, where are the levels in DRAM right now? We're in a pretty we're in a pretty easy positive gamma regime up here until where? 70.

[00:49:54]Okay? 70. Now, it's not that we expand significantly to the downside unless what? Well, guess what we just added today?

[00:50:03]What did we just add today for August?

[00:50:06]We just added 50,000 contracts down here.

[00:50:10]So, again, we're saying, "Yeah, yeah, we're it's we're there's not a lot of bear there's not a lot of put interest in here. $70 we might kind of grind it out here. Break 70, we may see some bearish pressure here." But again, what did we just add?

[00:50:26]We just added something we didn't previously have. We just added 50,000 puts for August 21st is 60.

[00:50:34]And you think about that, like, "Oh man, is this the first of maybe many that might be coming in here?" And guess what happens? We drift to 70, we break 70, 50k on DRAM is actually pretty dang big.

[00:50:48]And all of a sudden we break 70, and that $60 strike price down here starts to add gravity.

[00:50:55]Cuz guess what? There's not much else down there, is there?

[00:50:59]There's not much else down there at any expiration.

[00:51:04]Right? Yeah, we got 16,000 at 45, 11,000 at 50. Right? We got 17,000 at 650 at 65. That's 29 days out.

[00:51:16]Go shorter.

[00:51:17]Yeah, we go zero. Rise rally zero. Yeah, we go to go to go to next week.

[00:51:23]Yeah, we got 19,000 at 62, negative gamma.

[00:51:31]73's 18,000.

[00:51:33]So again, we start to lose 70, we lose 70, we start to see that negative gamma pick up. We just added a bunch today.

[00:51:40]So if we look at today's volume put to call ratio on DRAM, it tells you something. It's about balanced calls and puts.

[00:51:51]Puts are being bought at the ask for calls, but 43% at 50,000 contracts big.

[00:51:57]So, now all of a sudden we might be closing out calls, we might closing out puts, but we know that we're adding 50,000 puts. Okay?

[00:52:05]Um Manny said, "How do you differentiate if it's a hedge?" It doesn't matter.

[00:52:08]Okay? [snorts] So, when we think about hedge, so we think about hedge, we're talking about what? We're talking about the institution might be trading it.

[00:52:18]Now, what's the motivation of the institution that's doing it? Doesn't matter. Right? At the end of the day, the motivation of this guy doesn't matter, but we do get kind of a target and time frame up from that, right? We get TNT, target and time frame at 60.

[00:52:33]But again, whether it's a hedge, I just say hedge because again, I'm not saying somebody thinks it's going to 60, but it does start to open up 60 based on the size here.

[00:52:43]And so So, again, I'm just saying institution, we'll just say hedge just as a means of what?

[00:52:50]>> [snorts] >> Just tempering expectations.

[00:52:53]But remember that this gives you the institutional side, we also get the dealer side. The dealer side is the gamma exposure. So, when we look at the 50,000 contracts bought today at 60 for August, the puts in DRAM, and you look at the GEX structure, you realize it's pretty significant. That trade today at a 19 delta for August.

[00:53:13]And again, you lose 70 here, all of a sudden we do start to see some negative gamma enter in, and it's not just on DRAM, right? So, for example, again, we talked about it, we mentioned SPY, and Max on on here about to take over here, but notice SOXX, 10,000 contracts, 17 July 26 expiration 470 puts.

[00:53:35]SPY bought 50,000 contracts, right? 520 puts, bottom one print. Now, is that way out of the money? Yes, is. Is that spy print going to move anything right now?

[00:53:45]No.

[00:53:46]Is that probably a trade? Yes.

[00:53:49]It's not really a hedge.

[00:53:51]That SOXX trade, let's type it in here.

[00:53:56]So, I have some different settings that I that I use, but uh SOXX, right there. 10,000 contracts bought in one trade. It's a zero delta.

[00:54:06]It's way way out of the money. Is that a trade? Yeah. Is that going to move the market? No, it's not.

[00:54:11]But, what it's just a matter of saying, "Look, people are taking on bearish positions." Again, whether it's a trade or hedge, it doesn't matter. I would just say hedge just because it then tempers expectations. But, on the dealer side, what's going on in D RAM? That 50,000 contracts at 60 for August, we're starting to build that downside case, that negative gamma, increased volatility expectations. But, yes, we do have to see the selling to get there. We do have to break 70 for that downside negative gamma and right now to open up in D RAM. And we'll see where where it kind of builds from here.

[00:54:48]But, we saw it where we saw vol expectations really surge this week. Saw the failure of the bulls on Monday to deliver on the call side. Balanced trade between calls and puts, it's been like that all week. A little more puts than calls yesterday. We're building kind of that negative gamma downside expansion.

[00:55:06]Uh right now, if we break break levels we talked about on the S If you want to know why we talked about D RAM, hey, it doesn't mean the market is going to go down, but it's certainly a time where you got to prepare for the potential to happen. And the first steps generally, it's a function of just taking profits.

[00:55:23]All right, folks. Uh Mac is here. How we doing, Mac?

[00:55:26]>> Good. How you doing, buddy?

[00:55:27]>> Been to Chicago yet?

[00:55:28]>> Oh, I'm in Chicago, yep. I'm in I'm in Chicago. I'm in the uh the the Civic Opera Building right now at a uh an office space cuz we're getting the apartment set up.

[00:55:38]>> All right on.

[00:55:39]>> Yeah.

[00:55:40]>> Yeah.

[00:55:41]He's got connections.

[00:55:43]>> No, it's just a It's like a co- It's like a co-working space where you can rent a a private office. Yeah.

[00:55:49]>> Uh I probably would be at McDonald's just at the table.

[00:55:51]>> [laughter] >> They got good Wi-Fi. Did you know that?

[00:55:54]>> Do they really? I've always had a I've always had a hard time connecting to McDonald's Wi-Fi.

[00:55:59]>> Oh, did you? Okay. I never tested for this purpose, but uh I I used to a lot of writing. It's like I used to write like 3,000 words a day. It sucked.

[00:56:08]But my hands were like, "Ah, I can't I can't do anything with my hands." But anyway, but I I go to McDonald's. The benches are actually decently comfortable just if you have to sit for a long time and sometimes I go to library, but uh >> Yeah.

[00:56:19]>> usually McDonald's is closer and just right.

[00:56:22]>> [laughter] >> Anyway.

[00:56:24]>> Well, yeah, I got some good stuff to take us through for the intraday outlook today. Um I really like what you were highlighting there at on DRAM. Manny mentioned a a put spread. I might actually look into that here as well because um I am definitely uh seeing that same uh potential for greater than anticipated downside, which is particularly interesting. You know, I'm not necessarily interested in just downside, but um you know, the the swings get swings getting wider and wider in in this market and uh if things um if things, you know, if cold water uh really gets splashed on this rally, then you're taking out last week's low, um which is already several hundred points underneath us. So, there's definitely opportunity there.

[00:57:11]>> Yeah.

[00:57:12]And the pri- the pricing if you go like a 40 delta out of the money put spread for for July, the skew is pretty favorable for that. So, yeah. And I know you like to go go a little more time.

[00:57:20]That's that's an option as well, right?

[00:57:21]So, you can kind of take that, you know, Don does that lottery ticket stuff. I mean, you can, you know, again, I think you kind of go way out of the money sometimes and again, that that's another possibility to keep the cost low and the upside great.

[00:57:34]Um cuz again, it's going to be hard. I mean, it's going to be hard for the market to really see that, but and uh but we know cyclicality-wise, cycles, we peak in early June, we pull back, we achieve a higher high on the Qs, on on the on the Nasdaq Composite, we peak in July, and then we really don't find a trough until uh end of October.

[00:57:53]That's That's kind of the typical >> Yeah, that's often that's often the pattern, yeah. I had been talking about uh uh I I had been looking more toward July OpEx as potentially a high, which we've seen a few times in the last uh the last few years, but uh but yeah, there's some interesting stuff going on, particularly in the dollar, that has my eye today.

[00:58:12]>> Yeah, and again, that that that first week of first week of June, and you have that third week of July, the 20-year cycle, that that's what it's been, and you just come back at the end of October after the sell-off happens.

[00:58:23]>> Yeah.

[00:58:24]Interesting stuff.

[00:58:25]>> All right. Have a good one, man.

[00:58:26]>> Have a good weekend.

[00:58:27]>> And we'll see you.

[00:58:29]>> See you.

[00:58:31]All right. All right, good afternoon, everyone. I'll get my screen share going here. Um thanks for the idea, Manny, on the put spread on DRAM. We'll take a look at that and uh price some of those cuz um I actually uh I actually like that idea um as a potential trade.