Dark Pool Activity Picks Up Ahead of FOMC

Last week in my SPY All-time highs post, I laid out how we may see a pullback before heading to all-time highs. More importantly, I opined why investors should pay attention to these dark pool orders since these large SPY transactions can give us incredible insight as to the potential direction of the general market. Last week, we saw a multi-day rally after an eye-popping dark pool order of $4.8 billion order hit the tape on July 12 at the $442.52 level. This week we saw separate orders for $2.1, $2.6, and $3.5 billion on the SPY all within the same day. This is noteworthy because of the size of the orders occurring within a single day but also because they happened to be near 2 resistance trendlines.

The first resistance comes from the top line in the blue parallel channel that started mid-March of this year. The second resistance zone comes from the top that formed back in early 2022. Unable to break past this this level of resistance, SPY fell ~9-22% after being rejected. Fast forward a year later, we are here in the same resistance zone again with very tight and increased dark pool activity.

Here is a closer look at that big dark pool order this week. It occurred on July 18th.

$3.5 billion at $454.10

$2.6 billion at $454.19

$2.1 billion at $450.89.

SPY closed at $454.19 that day, near the highest dark pool orders. Coincidence? Also notice that on the following day, SPY closed with a doji candle. The creation of the doji pattern illustrates indecisiveness. Then for the next 2 trading days, SPY was virtually flat. My guess is that investors are waiting to hear from the Feds.

The table below details the largest dark pool orders this week. Investors should take note of this zone and dark pool orders heading into FOMC. Paid subscribers will be alerted on the same day if another big order hits the tape.