Macro Update – 01/28/2025

[00:00:04.05] - Speaker 1
Happy Monday, team. Welcome back. Happy Monday, team. How are you?

[00:00:11.28] - Speaker 2
Hello, guys. Thanks, Fabio. I'm fine. Hope the other guys are fine too. I know we had scheduled some really, really special today, but we figured out it's way, way more hard to keep up with actual tech. Made a connection with the Internet and made a connection with cameras and microphones than trading markets. So we have to improvise a little bit in this session today. Usually for today, I had a special guest that I know from the Internet, Tina. She is the head of Oil D trading in a big, big company in New York. But we have technical issues. Actually, lucky enough, recent developments in the markets are giving us also a little about to talk about and yeah.

[00:01:06.11] - Speaker 1
Tim, let's show the disclaimer for a few seconds.

[00:01:09.20] - Speaker 2
Oh, of course.

[00:01:21.01] - Speaker 1
All right, take it away.

[00:01:22.21] - Speaker 2
All right. Yeah, lucky enough, the market has given us some movements already in the morning or in the night. See it as you want. So we can talk about a little bit about this. But guys, bear with us if it takes one or two minutes longer to explain stuff or to bring our stuff up to the screen because it's pretty improvised right now. But yeah, let's have it. You all have screens open or have looked at it a little bit. Little bit of a down gap in the morning. Asia session and also London session there. NASA future here. The yellow line is coincidentally in my chart. It's I guess a 100 DMA futures are bouncing a little bit in this moment. Some say it's due to the new deep seek blah, blah search engine, which is seen as a competitor for all the other AI stuff that the US has created. And people are thinking and saying, and that's what the media is writing to us in the morning, that they are don't use that much money and all this stuff. And yeah, they are more profitable in the outcome. So this causes a little bit of trouble and a little bit of problem.

[00:02:46.04] - Speaker 2
We also had Donald Trump on the weekend with new tariffs against Colombia and all that stuff. Don't get misled by stuff like that. That's basically nothing of an impact a market. Yeah, because trade partnership with Colombia in the US isn't that big actually. So some might think it has affected also energy products like crude oil. But as if we can see, crude oil is minorly down on the day, little bit over half a percent. So nothing special in this area. We had some bigger moves in the morning in forex country. Right. So where my mouse cursor is, this is the opening from Sunday. A pretty weak dollar in the Morning we had a really strong dollar keep some pressure on emerge market ethics like the Mexican piso Brazilian how is it called real the South African rent. But things are normalizing a little bit. The yen is pretty strong. This is kinda, I say kinda a risk off move because one of the well known risk of pairs is the Aussie versus the yen traded. And since we are watching futures here on this screen it only shows us the futures traded against the dollar.

[00:04:28.07] - Speaker 2
So a sorry a yen outperformance this early in the morning over the day usually shows us a little bit of risk of movement in the market. Another asset always good for risk on a risk of caging bonds. We are looking here at daily charts 25 the belly and 30 year bonds or is it 20? Yeah, 20 set B sorry. And as you can see pretty, pretty big move in the day. I would watch this for the day. If you have follow through in this class you should be suspicious trading indices. If you are trading directional like me. If there's more appreciation in bonds in the current regime in the market it could be point a little bit more to the risk of scenario that we are seeing in this morning. So be a little bit careful today. In the morning equities built a bridge over their volatility. Pretty, pretty interesting last week, Thursday, Friday we have talked about in the community about a potential VIX trade or whatever you all want to trade. You Vixie S vix, vxm. There are different products, they all behave a little bit different. Don't want to go that much into how but pretty, pretty a big movement in the morning.

[00:06:11.23] - Speaker 2
We are opened like three points up, traded nearly seven points up 22 weeks in the morning I added futures below right these little lines over here because I always want to see if the front month of the future is trading actually above the over next month. So you can see a little bit how violent the stress is actually in the wall space. And the spread below shows here that's VX1 minus weeks two. This spread is narrowing but it hasn't flipped to the positive side. So in volatility it's pretty good supplied I would say. But there's no really, really big stress. I know it looks a little bit violent on the chart if the VIX is going up like that. But under the hood it seems under control. I would keep it like that. I mean no one knows what happens after 9:30, right. But in the moment things are under control despite NASDAQ being down like nearly 5% I guess in the morning. So yeah and I mentioned It a few minutes earlier last week we have talked about trade in volatility. Mapped out this stuff as well. Like the spreads and futures, where the base is in volatility, how the options, where is it, how the options exposure is looking.

[00:07:57.08] - Speaker 2
Jesus, where's the website? One second please. Let's go over the dashboard at Mentor queue. Want to show you something. I hope it's readable but it should be. Yeah, it is. Yeah. Going over some volatility stuff because we have to map out a little bit if this move in volatility can extend or is maybe at a peak where it's almost little bit suspicious where we can say oh it's already a little bit too high and overpriced. And yeah, let's look at the batrix a little bit over here in volatility. Total exposure for this week's expiration on 29 January was actually shown with negative GS and the negative decks. So usually you would say on this exploration day nothing really bad happens and yeah, the VIX should settle in the range where the biggest exposure can be seen. But I think over the weekend maybe it's the story with the deep seek. I don't know but. Or something different. Some people have caught off guard a little bit and this has changed now. So the metrics should then be green after this day because this is the metrics from the closing as of Friday. Interesting enough or not see it like you want it open interest on the right side.

[00:09:51.17] - Speaker 2
It kind of shows us more calls than puts. Of course you never know if they are sold or if they are bought. So if you want to have more clarification on that, you have to deep in a little bit bigger. But from the first perspective it looks like the open interest was still there. And if customers are long over here at the 20 strike, the stuff is in the money. Right. Right now if it goes higher, you know the story hatching has to be done and the question is here, will it further transit into the indices? Right. This was gamma exposure overall from the close of Friday. Yeah. Again this shows us just assumptions of these calls are B over here and these put support over here. But as you can see it kind of builds a range and that's always stuff I want to see. I want to see just interest. Where's the interest over there to map a trade out of this. And of course it's a little bit lucky to set up a trade on Friday afternoon in VIX and then you have this movement during the Monday open. You have to be honest sometimes with yourself so it's 50.

[00:11:24.29] - Speaker 2
A little bit of luck. Of course no one can predict stuff like this. Exactly to the point no one had it in the bingo card that the Chinese are launching ChatGPT like service that's so good it will pressurize US markets that much. I mean 10% pre market down Nvidia really if you are in the community and if you are listening to some stuff that I write. Yes the market was really crowded and tilted to the long side. Everyone is in the same boat and if stuff escalates you have those moves. That's normal. Just keep it like that. I mean if you open the chart since the middle of January we nearly made that up move that we made pre market down, right? So don't be that surprised. Things can actually escalate quickly. But what's important now if you are trading better one stuff like futures we are already pretty down like beyond one standard deviation and I think also two. And it's important to find an area now in the market where you can act. Okay. Because you have to keep in mind over the night and in the morning a lot of stuff has happened.

[00:12:50.10] - Speaker 2
Some people are actually doing hatching in futures for whatever reason equity portfolios or if they have been caught on the long side they make the road reversal that is called futures trading to the downside to have a positive P and L hopefully to the end of the day. And let's see, he has future. Where we entered the price. So we bounced ES futures that is coincidentally or funny enough the yearly open at around let's call it 950. I hate those uneven numbers. Makes me crazy. Call it 950. Keep it easy. The net GAGS exposure for ES futures overall expirations. Just by eyeballing what I mentioned with the VIX earlier you can see those little chunks over here. It's actually 950 big negative gamma exposure. I think the day will show if this area acts like kind of a support if bits are coming in right there in futures at least it's the area so far out of your daily ranges and your usually movements where you can plan a trade. Let's keep it like that. But much, much today will rely on volatility. I say keep in mind we have really important earnings this week.

[00:14:48.25] - Speaker 2
We have FOMC this week. A lot of stuff is baked in and if we look at the term structure in SPX it was kind of flat I think See. Term structure SPX0 the big king over here that's like five days, four days that should be FOMC right. So the green one was the ATM. So at the money options term structure implied volatility from Friday I think you all are aware of we already priced out a lot of volatility since the CPI was so good. Okay, keep it like that. So massive world crush and you should be watching stuff like volatility over the week as we are going into FC and in the earnings pretty, pretty closely. Keep an eye on how is WIX behaving in correlation with spx right? Is SPX up? You can also watch if SPX is up from the open 930. Is Vix up from 940 or is it down? Actually how is the correlation from there? That's stuff I want to watch and for FOMC stuff like let's call it, it's not really event risk because nothing special is actually priced in because the market is aware there will be no rate cut.

[00:16:38.02] - Speaker 2
So it's just the blah blah and the yapping from Jay Powell at the press conference that can shake up things. But for a rapid, rapid up move like some people have in their minds from August last year I would say that's not the market right now, not today. So this massive V shaped recoveries to some points yes but not retracing the whole move down because yeah the market is kind of uncertain right now as you can see and with the first big tech earnings and also FOMC this week it should be a really really interesting how the stuff will behave. And from economical data side this week is really just the FC for the FX traders we have also a Bank of Canada interest rate decision on Wednesday but for the US it's just the FOMC and maybe on Thursday GDB growth how the GDP growth has evolved in the US over the fourth quarter, that's something I would which I would watch as well. Yeah but overall FOMC PCE price index on Friday. Yeah it's good to know but with markets already shaked up like this, don't expect that much. Pretty cool is the fact.

[00:18:31.04] - Speaker 2
In terms of know your market right or the Russell I mean you would think with NASDAQ down 4% and ES also down like 3%. Smallcast should be suffering as well. But yeah as you can see we already find some of a button right here. This here in addition to the deep SEQ story kind of proves it for me that this could be the reason because why should the index like the RTY behave that good in comparison to big tech, right? So if the market is playing this deep sea thingy from the news rt. Right. Should be something that's telling the truth over here. Those stocks in the iwm, which is the underlying of the future, call it like that, they don't care that much about such stories. And yeah, without Jones. It's kind of the same. Right. We had the bottom like three in the morning already. And if you compare this to NASDAQ made a bottom two hours later already. Right. This looks mechanical down here. 100 DMA stop the selling over there. But yeah, it should be really interesting. What happens 9:30 with some of the market makers not hatching overnight inventory and weekend stuff that happens.

[00:20:26.14] - Speaker 2
So they maybe have to work a little bit. Maybe they are already done. But yeah, I would say watch volatility and it will guide the way today. So yeah, something else. Not really. It's equity volatility driving the bus right now. That's my main stance.

[00:20:59.07] - Speaker 1
Yeah. So yeah, let's see if we get any questions. Thank you, Tim.

[00:21:12.13] - Speaker 2
Well, I think the people are busy trading already. No questions at all for sure.

[00:21:19.17] - Speaker 1
All right. Yeah, I think it's going to be a busy, busy morning, especially in the futures market and at the open. So thank you for the update and for those guys who want to join our community and join our daily newsletter and access our free resources. You can create an [email protected] free and then obviously if you have any questions on any of the tools that Tim showed, please send us an email. We're always online Monday to Friday on Discord and we are live almost every day. Today we're going to have a really nice session on Forex. So if you go under our live sessions, we're going to talk about Forex today. In a few hours. In a couple of hours. In about three hours. And then we have our daily SPX plan for the rest of the week. We're going to have some really cool advanced strategies on Monday with Dan on options during earnings. So we're going to look at how can you use the options data to look for earnings. And then we're also going to have a really nice meeting at the end of the week that's not yet been published with an hedge fund manager.

[00:22:32.24] - Speaker 1
And we're going to be live talking about macro commodities and some other topics. So stay tuned on that. You can find all our events here. And again, thank you. Thank you so much. Let's see if we get any questions. Yes, put support on. Yes, yes, we did. We did get a nice, nice bounce there for sure. And then a question from Belkar. What times do the level update. So we have end of day levels, but we also have intraday levels. So if you guys come to our academy here, you will find all the different time that the levels updates. If you click on intraday Gamma models right here we already have the pre market level. So we have our 745shotshot is available. And then we're going to update that at the open. And then we're going to have nine updates throughout the day. So from 9:30, 10:30, 11:30, so you'll be able to access all this data. To get access to the data, just let me show you very quickly. You can come under data and then click on ask. And then here you have you just type your ticker. So if we type in for example QQQ and then go under intraday commands and then you're going to have your training view levels.

[00:24:07.11] - Speaker 1
And those are already the 745 intraday levels for QQQ. And throughout the day this will update. So you'll be able to add the, add the new, the new intraday snapshot as well. Anytime. All right, thank you, Tim, as always and see you again next week and see you in the room. See you on Discord.

[00:24:35.09] - Speaker 2
All right guys, then have a safe week. Don't do stupid things.

[00:24:42.18] - Speaker 1
Stay safe.

[00:24:43.22] - Speaker 2
Bye. See you.

[00:24:45.07] - Speaker 1
Bye.