Macro Update – 02/03/2025

[00:00:03.28] - Speaker 1
Good morning everyone. Happy Monday. Welcome back, Tim.

[00:00:07.06] - Speaker 2
Good morning guys and girls.

[00:00:09.22] - Speaker 1
I don't know today is the market open with a strong movement to the downside. So we're going to go over some some of the macro events for this the week and now to read some of the charts before we go into that and before I pass you the stand, let's go over our disclaimer for a few seconds. Right on you.

[00:00:43.28] - Speaker 2
Yes. All right. So thanks for tuning in and if you are new to this little format that we are bringing on here, we usually focused a few minutes about recent events in the market. That's the reason why you always see as a first slide the ES future like here and that we are going over some stuff that maybe can happen in the market over the next week. And I also try to yeah. Tell you something new. Maybe you will learn something and maybe you find a trade out of all the stuff that we are presenting here. Obviously it's always a little bit dodgy. That's the reason we always bring the risk disclaimer in to show specific things you should do or not should do. So keep in mind everything here, as professional as it maybe looks or not, that's up to you is entertainment. Right. Okay, so then let's begin with the last week. I hope my little slides are always visible to you guys. If that's not the case, just put it in the comments while it's unreadable or if there is something you didn't understand and then I go into more details over here.

[00:02:02.25] - Speaker 2
So that's the last week and we are going from left to the right. Just a quick explanation over the days what might has happened. Only one pain. There's vix future become later to it a little bit. But it's kind of interesting if you are looking at the events that happens over the last week and comparing this to volatility I think it's already visible about what the market cares actually and yeah but let's start Monday last week people are having whatever kind of news are pretty aware of it and I won't do a deep dive which is really funny because the company caused this trouble is called Deep Seq from China. I think the competitor to ChatGPT and all the stuff with all the chatter about yeah, they are way way much more profitable with less money in the system they need to bring up. So service it was kind of a big shaker in the market, right? The yes. Monday the lows was like nearly 5%. I guess if I remember right a big blowout in Volatility about futures traded from previous period close like 4 points higher until we have stopped the peak over here and the low in ES it was quickly recovered and if you look at Friday at the chart we covered the whole move.

[00:03:42.02] - Speaker 2
So I know it's a pretty, pretty dump and stupid phrase but yeah it's by the dip kinda. I know it's not really professional but it was a thing the last two or three years. So something more has to happen in my opinion that people are saying oh no no, don't buy the tip. That makes sense. Right? Okay. So that was the Monday quick recovery. Those quick recovery moves are mostly driven by positioning right in SPX or es. If there is a pretty big position or a significant position in the market that says no, not further down and monetizing of hedges maybe begins. Lost some bios and algorithmics are doing stuff. You can see on Monday the big 930 US open candle over here drifting us a little bit higher then the week was pretty boring. Also our FOMC on wetness day here was pretty boring. We range bound a little bit around in this area in es no big volatility. It was kind of priced in because no one and I think I mentioned it last week as well no one did expect anything special for the fmc. No further outlook and all the stuff and I'm pretty sure we have talked about this stuff last week as well.

[00:05:15.28] - Speaker 2
So first day was kind of the same. Nothing ever happens. We traded higher. That's mostly the case of stuff that I also mentioned last week's thing of passive buying flows. Think of buyback windows. We are in the earnings season right now and the buyback window from big corporates is already open. I have a cool chart I think maybe in the next few slices about it. Yeah and that's a passive force into the market. Say it like that. Always providing liquidity, always providing a bit and then position and kicks in and you drift higher a little bit. Friday I named it tariff baby tariff because we had a little bit of a shock off in the evening, let's call it like that or in the PM for the US guys and you can see that's the reason I added mixed futures down there as well. Monday and Tuesday have shown some volatility crushing the FOMC volatility was basically a non existent. Also on Thursday nothing special happens but on Friday you have these bits. Volatility to the upside shows you already the market is kind of concerned about all this stuff that happens in tariffs. We will go over it a Little bit later.

[00:06:50.19] - Speaker 2
What's kind of special over there? But it's always cool to compare your chart in nasdaq, use spx, es, whatever and compare it with volatility has also made during the same period. Because if the market goes down and there is no big uptick in volatility, it can also have some, let's call it mathematical things behind it. Right. This has not happened but this move on the Friday has actually seen some hedging and some downwards pressure in yes. Futures. Right. So that was our last week. We kinda had three boring days and yeah, if you're a day trader, two very special days where you can made a little bit of money. Right. I put this in because I think it's new to some of you and you maybe can learn something over here the concept of dispersion. And we go over it. So I have put in two charts here on the left side, right. The upper chart shows you indices from the cboe. They are provided from the CBOE and they are called correlated one month and correlated three months. And I also put a little text to the site here that you can maybe make a screenshot if you want to chime in a little bit or want to learn about it a little bit more what these indices are showing you.

[00:08:32.24] - Speaker 2
And the correlation indexes are showing you the correlation between the SPX index options for like if you are buying puts or calls or sell them. I don't know for SPX how the volatility is priced over there versus the basket of stocks that are equally weighted which are also in the SPX index. Right, because in volatility you can actually make dispersion trades where you can buy SPX volatility and sell stock volatility from stocks that are actually in the spx. It sounds a little bit dodgy in the first moment, but the second chart maybe will show you. Yeah, let's say the solution behind or yeah, what's the bigger thing behind it? Right? Because we want actually made sometimes trade of our knowledge. And I just want to tell you knowledge that is actually useful for you, right? And these correlation indices are showing you how dispersion works in SPX. Right. The SPX has 500 stocks. So easy way to think about it. I don't know if we have shooters in our community or if people ever fire the gun dispersion. Imagine you fire 500 bullets and they don't will land on the same spot all the day.

[00:10:04.20] - Speaker 2
Okay. They have dispersion, they maybe land here, here, here, here, here, here and whatever else. And this is what this Persian indices called DSPX is showing you. That's calculated over 30 days and that's the expectation of these 500 stocks how they will perform. Okay, and the last week was pretty, pretty interesting because equal weighted stocks like showing in the dark down Payne here with the rsp, that's the orange line, it wasn't that bad to be honest. But other sectors like the Max 7s or semis and also small cap crap stuff, that's a reason I added ARC and the IWM down there have been a little bit of a lack in the performance. Right. So the broad index at itself performs pretty good or is at least flat. But smaller portions of the index like the Max 7s are performing bad. So this causes dispersion moving to the upside and the correlation indexes are moving down because TSPX as a whole concept or as a whole whole basket of stocks is not that correlated as usual. It's kind of funny because last year or I don't know, two years ago, people have always say wow, Nvidia is the market.

[00:11:39.05] - Speaker 2
If Nvidia goes up, the SPX goes up as well. That's not wrong in the first, in the first, at the first glance. But with this you can drill in a little bit more with these indices and these indicators here and you can actually made an idea. Let's say if you are 2% below all time high and you want to buy a call on SPX because you bet on further upside, take a look at this stuff. You can easily map out is there actually a very violent force to the upside still present or do I have just like one or two sectors that are actually driving in these index like the spx. Of course you can also look at the classical stuff like I think most of you are aware of it. You have also those indications number of stocks above 50, 100, 200 DMAs. But keep in mind those are lagging indicators because they are biased based on price action. And this stuff is actually index looking forward into volatility. All right, that's a little learning thingy. I put it in here because we had these violent moves last week. They are over there with the yellow lines on the correlation indices at the dspx.

[00:13:17.29] - Speaker 2
So pretty big divergence over there. And the other trade on the other side is if you want to play the short side, obviously your odds are on the better side if the correlation goes down in all these indices. Right? So that would be the other side of the trade. If you want to buy puts or if you are think about hedges into the market. I had a swing trade last week. I just put it in here for U.S. information. I don't know if we have listeners here that are already in the discord. So I just made some screenshots over here how this looks in the discord then. And it's usually the members or sometimes I. If it's about commodities, it's mostly me looking into the data. Then I also add of course some knowledge that you have if you are trading a specific product like oil, which is the case here, and some dynamics what's driving the market right now, what could happen. And yeah, nice swing trade. I posted it here. I hope it's kind of visible on the right side. Traded in the MCL with 15 contracts. I had this trade put on a little bit earlier, I think two or three days before I got stopped out over there with like 75 ticks, I guess.

[00:14:53.03] - Speaker 2
And the second trade then worked pretty out. Yeah. As intended, I would say. And if you want to join the community, there's yeah. Always some, someone there in the channels talking about this stuff and it usually looks like this. Some charts, some data, then the trade gets posted. And I'm pretty sure during the time because it's 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 days, 10 day swing trademark. Also the management of the trade. Right. How to work with the trading stop and futures and oil. It's pretty, pretty important to talk about this because you can always have like a gap update on Monday or Tuesday if something stupid happens in the market and oil shuts up 1%. So I always take care of documentation and the management of the trade that you can stay in your short because the short is still valid and you just want to survive the volatility. Okay. All right, let's get into business. That's the week in front of us. Nearly every day has something. Yeah. To watch. I'm saying this a little bit slowly because we have again this Monday, like last Monday, and we have to be a little bit cautious here because the tariff story seems to be a little bit of a problem.

[00:16:33.16] - Speaker 2
And the first thing you should note and you should keep in mind in this market, uncertain developments, right. And markets like this with still pretty high evaluations in the earnings season with a Federal Reserve that I will talk about later a little bit if uncertain developments like with the trade stuff, that terror trade terrace stuff that's going on, it's not that great. And your read in the market could be a little bit, a little bit offside. Right. Because you have wacky Moves sometimes and okay, Today, Monday on 10am ISM Manufacturing PMIs. It's how the manufacturing sector goes into the US really really important data to map out current strength or weakness in the manufacturing sector A little bit early on but that's special note stuff. I would call it like that treasury refounding finance estimate. You guys know we have a new secretary of Treasury, Scott Besant and I call it not stuff because it's bond stuff and it's usually mathematics and all this stuff and normal. Yeah, people don't care about that much. But the so called qra, that's called QA actually it's. It's not. Treasury refounding finance estimates had a significant impact on the world market in 23 in autumn.

[00:18:18.11] - Speaker 2
Long story short, there is those refounding agreements they can switch the issuance. What did the. The treasury is actually giving out in bonds long term, short term. Right. Do we issue more bills? Do we issue more bonds? There are certain percentages what it's allowed and whatnot and. But it's more money market stuff and yeah, I will write about it in the community I guess a little bit. I think we have like a handful people care about it including me. But yeah, if you have exposure and stuff like bonds or options like tlt, some move can happens. But yeah, let's not go into deep in this because yeah, it's usually not stuff. Okay. Okay. Tuesday first job data this week. It's the first week of the month of February. So it's the week with most of the labor data. We have jolts. Jolts are telling you basically what's open in the job sector where a qualified worker is not on his place for work. So it's the first indicator Tuesday how strong the job market is going into the wetness day. It's the second part of the QA and the morning and some fat speech that's.

[00:19:51.14] - Speaker 2
Yeah, I don't watch it anymore. There's nothing special what these gentlemen or ladies can tell us More important on Wednesday, ISM service PMI. I hope you all know the GDP of the US is basically gained about 80% in the service sector. Right. Because yeah, the US is a service nation, not a manufacturing nation. And so Those services service PMIs are always really important. It's the counterpart to the manufacturing PMI that we have on Monday. Just from the service side, how's the service sector going? Our prices are. What are expectations of the different branches that are into the service industry? Okay, first day, weekly are initial jobless claims challenge job cuts. It's at the same day of label data and yeah and Friday, Friday nfp first Friday of the month like usual we talk about NFP and NFP is the topic for like I don't know two or three slides later. I will talk about later a little bit earnings this week. Well Palantir, I just added Palantir because we had some dodgy moves the last months weeks about it. Heavily driven by options and I'm pretty sure also a little bit of gambling. So if you have positions on there they reporting after the close today another semi stock amd tomorrow after close and then Amazon first day Amazon like 4 or 5 years ago was like what is Nvidia or Apple today in earnings?

[00:21:54.23] - Speaker 2
Everyone was hyped, everyone was really focused on Amazon biggest online retailer in the world. It's kind of important of course for yeah Q's, Nasdaq, all the stuff. So they report first day after the close and then I mentioned it one slice before the buyback window is fully open since Thursday last week I guess. And yeah buybacks usually during your earnings call or doing your earnings release as a company you also release the amount of buybacks that they are doing in the open market. What are you buying back in terms of shares and that's from Goldman Sachs down there and that's obviously billions, right? 3.5000 billions. So they compared the the years from 2020, 21, 22 to 24 and 25 is the estimate and obviously you can see that's the highest amount of share buybacks that we ever have. That's also a part of those passive flows into the markets. You have to think about it. It's not like oh buyback programs are buying back Apple today like 1 million shares and two days later Apple is 5% down. And they sell all the stuff? No, they just buy it. It's just buyback. The money for that is already written off or planned in into the program and they hold those stocks like forever or like many many years.

[00:23:45.06] - Speaker 2
This adds liquidity to the market in a certain amount. And yeah that's a false more in the background of the market but from my perspective buyback window always important to mention at least. All right. This is gold. Why I added gold because goat yeah made a new all time high on Friday. Yes, that's Friday. It's Thursday first date. It's Friday. Yeah, Friday new all time high gold 2 850ish should be. Why is it like that? Like two or three weeks ago we pointed out in the community that goal is likely to up run this all time high and also will pierce above a little bit. There was significant activity around 2,900 which is $50 more actually. But we then find out it was sold calls most of the time. And still the plan worked out a little bit. And it's usually driven not because of risk off. People always say oh if goat performs that good something bad has to happen. Right. But no, that's not always the case. Think about it. Gold is still a commodity. Commodities are usually driven by supply and demand. Right? Not the supply and demand that you are seeing in your chart.

[00:25:32.07] - Speaker 2
No, the supply and demand from me. And yeah, let's say Fabio I want to buy it. Fabio want to sell it to me. And a huge, huge market is Asia and India. That's why I added this little headline in the middle just to keep it in mind and talk about it. The Chinese central bank still buys gold. They did it last year in tremendous amounts. I did it this year again or do it still. And so gold goes a little bit away from this. Yeah. Risk off character that it has like a few years ago. And it also drift away a little bit from the old saying if the dollar moves up, gold goes down. Right. That's a model of correlations a lot of people are talking all about. But as I always say, correlations can flip. They are not always minus 1 or minus or plus 2 plus 1. Sorry. And go does not care about the high dollar price few months. It kind of moves the lockstep a little bit. And if you can see, I mean I hope you can see it on the right hand side we have GLD here. That's a gold etf.

[00:26:59.24] - Speaker 2
We have data for this also it's pretty amazing with the one month skew down here that we didn't move higher but the price moved significantly higher. So there's already some kind of exhaustion up there. Does not mean you have yeah. Buying the next few days on lower prices. But this was. Yeah, how do I say it. A lame top right. We pierced the all time high and then we traced. Yeah like 10 minutes or 20 minutes later. It's a very interesting fact that gold actually made it Friday during the cash session, 9:30 open at the all time high. And then they sold it practically and they sold it also into the tariff news that we had I think 1pm or 12pm on Friday. That stuff I'm watching if there's a correlation and yeah, top, bottom left pane over here, that's volatility for gold futures from the CMEC world tool and SKUs all doubt are still tilted to the upside. Right. It's a positive skew. Not on all time highs. Price came a little bit down and I would say if there isn't a big risk off event in the market where we need liquidity and gold has to be monetized or sold, chances are high.

[00:28:36.21] - Speaker 2
We are testing those highs again. Of course there are some sinister stories right now. JP Morgan is about to deliver like 5 billion in gold. I guess there was a big article on Bloomberg about it. So someone is cashing out a little bit. It doesn't affect features that much. So yeah, let's stick to the technicals over here. That's the reason I also added on the right hand side bottom pane the Mentor Q Netgex chart. Is it? Yes, a Netgex chart for gold futures and we are trading in very, very healthy areas. Up 2,800. Yeah it is 282815 to 55. Those are big strikes and yeah gold has some pretty big moves intraday sometimes. And yeah, think about it. There's no need to spend all the time in the SONQ all the day. A few other assets out there. All right. The elephant in the room right trade was let's start about what is about Mexico and United States. I choose this instead of Mexico and Canada because you can see on the first view that the U.S. is importing. That's the lower left side over here. United States imports by country. Mexico is. Yeah. Leading before China and Canada.

[00:30:25.29] - Speaker 2
I mean those numbers are from last year. We don't know how it changed now a little bit. And also on the right hand side, United States export by country and also Canada and Mexico. Okay, let's keep it like that. Mexico is a big, big trade partner of the US it's actually the biggest one. Okay, so why tariffs Contents now from the Trump administration is actually immigration and the fentanyl crisis I think. And it's also stuff that I'm reading that's some kind of put pressure on this stuff that secure borders or will be a thing in the future. And the that those trade stuff is a little bit. Yeah. To put the screws on the funds. Right. For the Mexican administration and look how they will react. Because for Mexico it's actually a huge problem if there are tariffs if they're exporting stuff into the US because 84 Mexico exports per country into the US on the other hand also Mexico imports by country, United States 45. So as you can see they are relying heavily on the US So something has to happen over there. Right. For the US It's a problem with imported stuff from Mexico.

[00:32:04.08] - Speaker 2
A lot of fruit companies also in the south or in the southwest, a lot of energy companies are relying on Mexican imports. Right. And it's already consens a little bit that this might be inflationary for the US which is a big problem because we are battling side two or three years with inflation going down. And all this stuff creates this uncertainty in the markets. And that's the reason you have these. Yeah, sinister moves sometimes. I mean the US dollar and Mexican pizza or right hand side upper pain and the U S cut on the right hand side lower pane, they gapped up pretty wild today in the morning. Right. So 2%, something like that, that's actually very big in forex markets. Right. Think about all the billions that are getting switched over there. On the other hand, if you already survived in terms of trading, of course the first term from Donald Trump, I mean we all know he likes to chat a lot and make announcements. It could happen that those moves are actually coming back. Right. If there is a news headline like okay, the trade war and with the terrorists that has solved a little bit no 25 or we have agreed on 10 or 15% this stuff will get priced out again.

[00:33:48.11] - Speaker 2
Right. So my advice here is your horizon into the market in terms of risk, in terms of time you will spend in those markets. If you're a FX trader has to be bigger than the last few years because the last few years haven't seen that much FX volatility. But those times are over right now. Okay. And if you are trading you are also always a risk manager and you have to be adapt your risk management into the environment you are trading. Right. So that's the main takeaway here. Long story short, that's big, big gibbery talking stuff. In the end it's about risk making money. So plan bigger here. Okay, so that's the main topic we will talk about today like two or three weeks ago in the community. It was during the week where the Trump Coin coin was announced and some of the people were like, oh, that feels like a top. And I also thought about a little bit, those markets are pretty, pretty skewed to one side which is the upside. Everyone is on the same boat, everyone is on the same side of the market. It's actually pretty expensive to hop on this train if you want to bet on the upside for stocks.

[00:35:32.05] - Speaker 2
So what says the bigger picture? And this is a little bit of a macro X course because usually big traders trading macro, there's Always a wording like you are early adapt adapter in your trade, right. You will be short something where everything or everyone is long or vice versa. In the other direction, of course, you might have a bigger drawdown, but in the end you are right and you bank in big, right? That's basically macro. Be on the right side when everyone is still on the wrong side. So. And because I'm trading mostly US stuff, US stocks and US indices, we are keeping our eye on the US economy a little bit. And of course that's all data stuff. Right. Just want to tell you a little bit what is always important to watch and what the market is telling us right now. Let's start with inflation. Okay? Inflation was a big thing the last few years. Our last inflation prints, that's the upper hand pain. U.S. united States core inflation rate over all the times where the inflation rate month over month came in with 3.5, we kind of pinned 3, 3 or the December one was already a little bit lower.

[00:37:08.21] - Speaker 2
You might think that's actually good. Keep it like that. It's actually good. Inflation comes down. But there's also a reason inflation comes down. Right? Inflation can stay very, very long, elevated and can grow much, much higher if we all have enough money, if we all agree to pay higher prices. From your grocery shopping to buying a new house or a new car or traveling by plane. So all this stuff also creates growth into the economy, which brings us to the next one, the United States gdp. That's quote, that's a quarterly chart, Right. And if you look closely the quarterly chart, I mean it has some prints like 1.6, 3%, 2.4. The last print was 2.3. Keep it easy. 2% growth over a quarter, that's actually pretty good, right? Look at other developed countries. Yeah. Like in the eu, like in Germany, it's flat all the time. The UK it's flat. Of course, the Eurozone itself, they dream from numbers like that. Okay, and why is it? Because I mentioned it, People have work, people can pay for stuff. Brings us to the unemployment rate on the right side here. The unemployment rate, yeah. Bottoms out a little bit the last month into the us the last recent print was a little bit lower.

[00:38:57.17] - Speaker 2
Of course there's. There is not very big movement right. When those numbers are coming out like 0.1% or 0.2% are already big movements. That's of course stuff that has developed. But there's a saying in macro, especially with growth and unemployment up here, if something starts to crack down there, if the economy is not Doing well, some people are looking with EVIs on credit spreads. Okay. And this is the stuff in the middle here, Credit spreads. Oh that's from the fret, the Federal Reserve of St. Louis. And the chart is from the bank of America. And that's an option adjusted spread which compares BB graded so below investment grade corporate bonds with a fitting basket of U.S. treasury bonds. And the strength and the spread between it measures the risk. What kind of risk? Keep it easy. The risk of holding those assets. Okay, so if this chart goes down, there's no big risk for you holding Covid bonds from companies that are likely to go faster and quicker bankrupt than Nvidia, Apple, Ford or Costco. On the other hand, your return is of course higher from those companies because they are more risky. And on the left side there's a long term chart from like 2017 can see it.

[00:40:57.05] - Speaker 2
But the cutout thing from the right and they're on the right side here with the yellow frame is the current development in those credit spreads. It was in media like a few months ago that they have hit historical lows. And I'm not saying it's picking up a little bit, but we have to think about it. Not like a chart that you are trading or think about the assets that made a low never seen like 1999. Think about it, how low it could go in the future, right? How saturated is this market? How many people are already in this market? Because this is stuff you can trade actually, right? You can buy baskets of high yield corporate bonds and short other bonds against it or just hold them until maturity. People are still very confident with their risk in markets to hold those assets. Right. If you have a terminal like Blue Book or lseg, you can also look at those CDX indices, credit spreads and have real time data over there. I always use those to show it to the people because it's more visible and it's more easy to talk about it without having or a terminal or something like that.

[00:42:38.12] - Speaker 2
And this stuff over here is like every other indicator. It's based on stuff that already happens, right. So keep in mind we are doing pretty good on an inflation that is still above target and people are tend to go into risk to have returns. So now you have to map this against what could happen in the market. That this picture will reverse the risk, right? That people are saying oh no, it's about, it's about to crack somewhere into the market. And it's pretty easy to think the Fed might be the elephant in the room because we have just two and that's the right hand side chart here on the bottom pane. We have just two cuts this year. So in macro we think about it, what is maybe the recent development in the job market. If jobs are coming lower into the market that will cause the repricing of those rate cuts. Two or way way to less in my opinion. If those indications above here are start to moving. Right. If there is a GDP print on the next quarter like 1% which would be yeah below 2023 and the stock market from now on hasn't moved 10 down or 10% up.

[00:44:32.01] - Speaker 2
Something will happen over there, right. The stock market will then say oh just two rate cuts this year. GDP is going down. Growth isn't that good as it is. Valuations might be too high. Okay, so obviously that's a 30000 foot view but that's some kind of a process. At least it's bigger in the end. But I can't fit it here in the presentation because I'm already reading 45 minutes. But it's. But it's stuff you can work with in the beginning but. And that's also important in Metro. You can have the brightest view about certain assets or the economy. You can know everything about oil, why it moves fundamentally all the stuff. If the technicals are not aligned but you plan to short those markets, you will probably lose. Right. So the other side of our trade is always technical stuff and this is heavily concentrated for equities here. Okay. But there are certain measurements you can look through. So I added a bunch of here and we talk about everyone like yeah, one or two minutes and I'm sure there's yeah at least one or two new stuff in. All right, who's present in markets?

[00:46:08.29] - Speaker 2
Right. We are going from clockwise. Clockwise. We start with volatility, implied volatility versus historical volatility. That's the right upper pane. I highlighted some areas where those two volatility measurements are actually make a crossing into the market. That's important for some mandates into the market because they are forced to buy during low volatility regimes and they are not selling when volatility is high. They are hiding in other products. Right. You can also buy adverse QQQ and can still only be long whilst betting on QQQ is falling. But those are so so called volatility controlled mandates. They just act if volatility is pretty low and usually if implied volatility goes above historic volatility over a certain time span they are not that active into the market sucks out a little bit of Liquidity because they can't hit the buy button every five minutes for like 2 million. They stay flat or buy other stuff then. If you are options trader, you're already familiar with SKUs, right? You can skew out everything you want from one month to three months. Thing is here you should look at areas where calls already high priced but the market does not move higher.

[00:47:59.29] - Speaker 2
Also vice versa. If puts are already priced pretty high but the market makes a bottom or realized the fall isn't that high. Yeah something might change. You can put on a risk reversal trade. So call it like that. The other systematics that are in the market, CTAs. That's the chart on the right side, right? Trend following programs in futures. Or it's also adding liquidity to the market. And if they are wrong footed it happens sometimes in oil or where they have longs in their books but oil is dumping hard. They have to switch the position then, right? And sell those instead of holding those assets. They are also present in ES&Q. That's where I added NQ chart above there, right hand side lower pane. Those are bond yields, right? Risk on a risk off scenario. I mentioned it with gold in the beginning a little bit and yeah it would be pretty, pretty suspicious if bonds are performing very good over the next. Yeah, let's say weeks or days. Because if there is a revelation risk on or risk off equities should sell. Not pretty hard but they should sell because there is no environment now for being very long bonds and being very confident in your bond trade.

[00:49:48.23] - Speaker 2
So if bots are moving to the upside be very very cautions in equity loans. And also some mathematical stuff I added on the right hand side the so called risk premiums for volatility. That's why I added those snapshots from our bot here. It always gives you out those handy little tables where you can compare like here from the 28th of January on the right hand side to the 2nd of February on the left hand side implied wall versus historical walls. And down here there's the equitation for you how you can calculate it and volatility risk premiums. It's rule of thumb. There's a little bit more math behind but you can say if volatility risk premiums are very very negative. Relatively spoken because you have compared to the history a little bit. It's actually cheaper for you to put on a hedge, right? It's up to you if your hedge is a put exposure in queues or SPX or whatever or is it called exposure and volatility yeah, like vix, Uvixi or stuff like that. Okay, I know those products have yeah. Different characteristics. Right. If you compare just VIX calls with Uvixie calls, it does not make sense to trade them both equally.

[00:51:33.09] - Speaker 2
Yeah. Because in uvixie feta decay is much, much more a problem than in VIX options. But at least with this little formula you can make an assumption. Is my trade idea cheap or is it important? Right. If volatility risk premiums are having a bigger, bigger negative number, it's cheaper for you to put those hatches on. And yeah, if it's positive, the volatility risk premium, vrh, is positive. Really big. It's actually yeah, too expensive to jump into hedges for volatility or downside in equities. So yeah, maybe make a screenshot from this. Could be handy in the next weeks with all this channel. And in the end we can always provide you with the data stuff that you need. That's the reason I made the screenshot from the SPX dashboard on the website. All the data is here. Tone structures, SKUs, gamma exposures, they pretty, pretty handle five day swing model. Yeah. And also the option metrics, that's the white one on the right side here where you can compare all the different tenors put col exposures, gammas, deltas and yeah, all that stuff. So long story short, if you have a thesis or it's over in the stock market, map out the costs of your trade.

[00:53:10.20] - Speaker 2
Map out if it makes sense, map out positioning in the market that you have an anchor where you go into the market, where you go out from the market. Right, so and that's the last one actually. All right, I have to drink a little bit and thank you Tim.

[00:53:36.03] - Speaker 1
This was amazing. Let's see if we have more questions. We have a question about Google. We're gonna talk about it in, in an hour or so we have a session with Dan on strategies with option for earnings. So please stay tuned. We're gonna have a session in just like an hour. You can find it in our YouTube channel, our live stream. So we're gonna go over there and then for those who want to get access to all the data that Tim has shown, then all the models you can follow [email protected] this is all part of our new dashboard and all our models. So if you guys want to learn more, please join, check out our website and, and also if you want to ask any questions, please send us an [email protected] and obviously you can find Tim within our training room. Every day. So very active there.

[00:54:36.09] - Speaker 2
Yes, that's true. Let's see.

[00:54:45.06] - Speaker 1
We have no questions so far.

[00:54:48.21] - Speaker 2
Yeah, it was a lot of stuff. But yeah, I mean, why not talk about it?

[00:54:57.22] - Speaker 1
And it's gonna be a busy week. So next week I think we'll have a really nice update as well.

[00:55:04.08] - Speaker 2
And for those and for those that were a little bit disappointed about our last actually live guest that I had bring on I'm cooking over there. Be with me. I think I will record it and then set. Send it out. Yeah. As a normal video, not as a life.

[00:55:21.17] - Speaker 1
But still working technical issues.

[00:55:26.13] - Speaker 2
Yeah.

[00:55:29.17] - Speaker 1
All right, awesome. Thank you, Tim. Thank you guys for watching and see you guys back in just over an hour, 10am with our option advanced option strategies ahead of earnings with Dan. So see you guys very soon and stay tuned and see you again next Monday, team.

[00:55:48.12] - Speaker 2
All right, guys, then have a nice week. See you. And don't do stupid things.

[00:55:56.12] - Speaker 1
Bye, guys.

[00:55:57.11] - Speaker 2
Bye.