I present the market through the lens of an institutional trader/investor.

I use two tools:

-Dark Pools
Large institutional transactions that create price levels of highly concentrated volume. Highly concentrated volume at specific prices create strong support & resistance- Institutional support & resistance.

-Volume Price Analysis
Analyzing the relationship between candle spreads/wicks & volume to determine institutional accumulation or distribution.
VPA also validates or invalidates institutional participation in trend.

SPY

There are two downside imbalances that will inevitably be rebalanced.
This is obviously my #1 priority-
Getting a swing entry short to target those imbalances.

A huge barrier lies just above…

It’s very possible price rejects here and continues trending down.


Of course, it’s also possible that price breaks through and continues the seasonal rally into EOY before further exhausting itself, creating more imbalances, and inevitably trends down again.

Keep your head on a swivel and always be ready for anything!

One thing is for certain.
The SPY will rebalance to the downside.

One thing is not for certain… When.
Institutions have all the time in the world.
You’ve heard the common saying;
“The market can remain irrational longer than you can remain solvent”
This is exactly the retail disadvantage and the intuition’s edge.
It doesn’t matter to them when price rebalances. Only that it will.
Keep this in mind IF the market breakout and does not remain in the short-term downtrend. Keep losses small and prepare to strike again.

Here are some of the largest Dark Pool levels on record for the Daily time frame and below! These levels can be extremely useful for identifying large barriers in price as well as intraday volume patterns.
You can see there are two major resistances before the $441.84 dark pool would be tested.

Conclusion
The SPY will inevitably to go down from these prices.
The weekly imbalances below are my #1 focus.
As price approaches $441.84, the R/R for shorts is extremely favorable targeting $412.22 & $393.69

However…

I want to maintain a relatively neutral bias.
And I want to place a heavy focus on where the QQQ opens and how it acts to begin the week. (read next panel)
I am well aware that this time of year is typically extremely bullish.
A scenario I must be prepared for is public participant’s euphoria pushing price through the current weekly downtrend and prolonging this extended rally- creating more downside imbalances to be executed on at a later date. This would not invalidate any prior volumes.
Most importantly it would not annoy me in the slightest. I can wait.
And I can execute longs elsewhere…

Please continue reading for my analysis on the QQQ as well as the IWM

Unusual Options Flow
Week of 10/23-

Last week-
-$162M Bearish Flows
+$441M Bullish Flows
The flows through November were extremely bearish.
The flows staring in December were extremely bullish-
Stretching all the way to 2024,2027, and 2028 expirations.
(see last weeks newsletter for more details)

This week-
-$180M Bearish Flows
+$281M Bullish Flows

Once again, flows are predominantly bullish-
Bears taking the shorter expirations (end of November)
Bulls taking the longer dated contracts- Continuing to size heavily in 6 month + expirations.
Overall, it appears the big money is prepared for a seasonal rally and continuation of trend (hedging their short position on shares) whilst also keeping short-term exposure for a potential rejection in the coming weeks at $441.84 with riskier shorter dated contracts.

11/21 -$13M
11/24 -$2M
11/27 +8M
11/30 -$85M
12/01- +$7M
12/05 -$53M
12/06 +$11M
12/07 -$5M
12/22 +$4M
12/27 +$7M
12/29 -$4M
1/31/24 -$18M
3/15/24 +$11M
6/21/24 +$123M
10/18/24 +$21M
12/20/24 +$24M
1/17/25 +$65M

QQQ

The QQQ does not share the same imbalance as SPY in March.

Both the SPY and QQQ have seen weekly re-accumulation on the past two lows. This heightens the probability for short-term continuation higher, despite the clear imbalances being left below just last week.

Something I’ve shared multiple times now:

Back in January of 2022, QQQ saw it’s largest volume in over ten years on an accumulation candle in this support zone.
SPY share’s a similar zone, seeing it’s largest volume in over 2 years-
Just at slightly less notable levels not visible on the weekly chart like QQQ

$352.05 is the largest dark pool on record for QQQ
It’s extremely notable this larger relative dark pool, as well as the larger relative volume (largest in 10+ years compared to largest in 2+ years) being on the QQQ

Think of it like this…

$352.05 is SPY’s 441.84…
QQQ is over it’s massive level.
SPY is under.
This makes things simple for which indice is more stable- which one should be focused on for weakness and which one for strength (On the higher time frame. Can vary day by day.)

Conclusion
QQQ is stronger than the SPY
If the market is going to continue rallying, only delaying the inevitable pullback to sub $400 levels- then I expect the QQQ to be the X factor.

Heading into this week- notice the QQQ closed directly at resistance.
These two levels (creating a zone) will be crucial- specifically to start off the week. If QQQ opens over this zone ($367.85) the odds of a red week on both indices decreased drastically.
If this happens, I am focused on trading upside until the next major resistance levels hit where I will not be so quick to go short anymore-
I will likely observe and collect data.

If the QQQ opens INSIDE this zone / below the odds of a rejection increase dramatically. The ideal short entry on SPY would still be slightly higher, so I wouldn’t be surprised to see an early week rally followed by a mid week reversal if that’s the case.

Keep reading!!!!
IWM might be the best… Saved it for last…

Unusual Options Flow
Nothing notable on the QQQ this past week-
Mostly a lot of SHORTER dated bearish orders just like the SPY (a few million)
11/10 expiration seems to be the heaviest.
If the QQQ fails to lead the way with a strong open on the week, shorts on both indices could pay well, leaning more so on SPY of course, but QQQ is at more notable resistance.

VIX/UVXY

Now, this is extremely interesting to me.
The UVXY goes down over time. This is not my vehicle of choice to profit on downside in the market (meaning I don’t necessarily want to buy this) BUT I think it’s a great tool to measure potential sentiment and volatility.

This past quarter, UVYX has seen it’s largest volume ever on an indecision candle, suggesting some volatility is about to hit the market.
(Usually bearish)

These levels marked are very small dark pools, that could act as potential support- similar to the QQQ resistance.
I have a feeling that if the market is going to fold back next week-
QQQ needs to open inside or below its resistance and UVXY needs to open over / inside this support.

If that doesn’t happen, I’m prepared for more short-term upside.


Unusual Options Flow

IWM

A very different chart than the SPY and and QQQ
Clear accumulation. Huge base formed.
Imbalances ABOVE- unlike the SPY and QQQ

Finally, a sign of life from IWM after the constant accumulation this has been seeing (have talked about it multiple times)
As long as this support below continues to hold, I gotta say, I think this might be ready to really take off.

Clear DAILY accumulation patterns not visible on the other indices.

Just like the other indices-
A key downtrend is being tested / about to be tested.

This is also a better view for all the dark pools in this area if you want to use them on your own charts.

If the market begins to truly breakout, IWM is going to be #1 focus.

Unusual Options Flow
$180M+ Bull Flow
Mostly concentrated in March 2024+
Similar to SPY flow

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