SpotGamma’s new Dark Pool Dashboard breaks out the activity in Dark Pools by sector. This can reveal where large institutions are allocating their capital, and reveal some interesting trends (full FAQ). We break out the Dark Pool readings by sector in chart below, and color code them based on strongest (green) to weakest (red). Our studies suggest that stocks with a DPI reading >45 have strong forward returns, and a reading <35 forecasts weakness.
Currently we are seeing buying in the Energy sector, and both Basic Industries (materials) and Public Utilities look weak.
Below we’ve plotted the XLI (Basic Industries/Materials), XLU (utilities) and XLE (energy). You can see that the low DPI readings in XLI may correspond with a top, while the XLE has been having a very strong few weeks which corresponds with strong DPI readings. Additionally XLU may be topping out, which correlates to the somewhat weak DPI reading.
Based on this data we would look for continued relative strength in energy vs other sectors. These sector readings may help investors sort through significant monetary and fiscal policy changes in the coming months.
Note that these Dark Pool readings are also available on over a thousand single stocks, too. Simply join our Pro level subscription for a free 5 day trial.