Significant Dark Pool Orders (04/28 - 05/02)

A Technical Overview

Dark pools are alternative trading systems designed to facilitate large trades by institutional investors without impacting the public market. They allow participants to buy and sell securities anonymously, keeping the details of their trades hidden until after execution. This advantage has led to its increasing popularity, and for the first time off-exchange volumes have surpassed those on on-exchanges.

By tracking dark pool orders, we may gain insights in their sentiment. For example, multiple large buys or sells in dark pools may indicate a bullish or bearish trend, respectively. Tracking these trades helps traders anticipate potential market movements before they become evident in public exchanges.

This week, we observed significant dark pool activity concentrated at several key levels, suggesting the formation of new support as SPY is currently trading above them. If SPY maintains its position above these dark pool levels, it indicates ongoing institutional accumulation. Conversely, a break below these high-activity zones could signal further downside risk.

See where institutions traded SPY and Nvidia (this week’s highlight) on the dark pool exchanges: