If We Get These Levels, a Correction Is Coming Dear Savio, Last week, Wall Street’s biggest hitters went very heavy on the SPDR S&P 500 Trust (SPY), the iShares Russell 2000 ETF (IWM), and the Invesco QQQ Trust (QQQ), the Nasdaq 100 ETF, in the Dark Pool. That leads me to believe that if we go below the levels I’m about to show you, we will most likely have a correction. Let’s start with the SPY. This is the biggest ETF out there. This is where the Dark Pool trades the heaviest. For the candlestick lovers out there, you probably already noticed this bearish engulfing pattern on the SPY’s daily chart. 
This week, I am bullish above $370.25 and bearish below $363.50 for the SPY. On the IWM, we got some heavy Dark Pool activity around $189.26- $191.30. This week I would be bullish above $192.50 and bearish below $188. 
Last week on the QQQ, we got very heavy Dark Pool print activity at $308.19. We are well below that level right now, which is bearish. This week, I would be bullish above $309 and bearish below $298. You can see on the chart below that really heavy volume came in on Wednesday, December 9. Keep your eye on the QQQ. 
GM Bearish Spread and F Puts Last week, I also spotted some massive Dark Poole prints on the automobile stocks. That’s why I recommended a General Motors Co. (GM) bearish debit put spread on Monday, December 7, and the Ford Motor Co. (F) January 15 $8 Put Options on Thursday, December 10. You can see on the chart below where the Dark Pool traders started selling back on November 30. It splashed up slightly before moving lower. 
I have also circled on this chart where the trend changed from an uptrend to a downtrend. That’s where the four-day exponential moving average (pink) moved below the eight-day exponential moving average (black). This crossover signifies a change in momentum. On Tuesday, December 8, I spotted an extremely large Dark Pool print on Ford at $9.21. I like to wait a few days before entering a position because it does splash quite a bit sometimes. You can see in the chart below that Ford did splash up after the print came out, but over the next two days, the stock went lower. That’s why I made the recommendation to buy the $8 puts going all the way to January 15. Our position is already up quite a bit. I’ll probably recommend taking some profits this week if Ford goes below $9. 
XLF Puts The financials started to move downward last week after those massive Dark Pool prints came in across the board. Keep in mind that the bank stress tests are this Friday after the close. You can see on the chart below that the Financial Select Sector SPDR Fund (XLF) just dropped below the eight-day exponential moving average/ We need it to move down to $27 or lower by Christmas to take some profits on the XLF Jan 15 $25 Puts that I recommended on Monday, December 7. 
GLD Bullish Spread Last week, more massive Dark Pool prints came in on the gold sector. If you look at the seasonality chart, you will see that mid-December is usually when gold starts to move higher. 
We still hold half of our SPDR Gold Trust (GLD) Debit Call Spread, which does not expire until January 15. Bitcoin and the U.S. Dollar I see Dark Pool activity on everything from stocks and bonds to the U.S. dollar – and recently, we got some Dark Pool activity on bitcoin. To be specific, I saw some highly unusual Dark Pool activity on the Grayscale Bitcoin Trust (GBTC), which enables investors to get exposure to bitcoin through a security. Last Wednesday, December 10, I told my Twitter followers to be bullish on GBTC above $22 and bearish below $20. 
Below is the picture I posted of these rare Dark Pool prints on bitcoin. 
You can see from the chart below that bitcoin has moved significantly higher after those massive Dark Pool prints came into GBTC. 
The dollar’s weakness has been very beneficial for bitcoin. If you recall, I shared the weekly chart of the dollar, pointing out the “dreaded h” bearish pattern. The dollar has fallen below a major support level. Its next support level is at around $89, which goes back to 2018. When the dollar falls, gold, oil, and bitcoin are more likely to move higher. I spotted many new Dark Pool prints coming in last week. But before making any recommendations on them, I am going to let them splash a little bit. In the meantime, watch those major levels on the SPY, IWM, and the QQQ for a possible correction coming. Until next time… Happy trading,
Stefanie Kammerman,
Editor, Dark Pool Trader
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