I always start with our options market dashboard to look at the statistics table. I sort it by delta premiums which gives me the most bullish and bearish flow for the day. This is my set!
$SNAP $CVS $AAPL $VIAC $NIO
I pick the top 10 most bullish and bearish stocks in the list and search them on Scany.
For the purpose of this thread, let's just pick $AMAT and $CVS since I just went over them.
Searching them on Scany gives us some more important information about the stocks.
Looking at $CVS, I can see we had a daily breakout here. Looking at the chart, the breakout was there but it failed by the day end. However, it's easy to see that the price is at an all time high and has been trying to break the resistance level. That is good.
Continuing with $CVS here. I usually spend some time looking at other confluence factors to make me more confident. Looking at daily block trades, we can see that $CVS had a surge in the last few days.
Some might be buying a lot of shares here.
That's all the confluence I need. I am happy with the setup here since plenty of things are supporting it.
- Flow is bullish
- Price is trying to break resistance.
- Large block trades
- About to be at all time highs.
Setup found! Just gotta wait now till we break resistance.
Let's do $AMAT now.
The stock went down for about 2-3 weeks but finally recovered and went above the 20 moving average. Stocks above their moving averages are always good.
Plus, this is in a strong uptrend as we can see from Scany. That's good too.
$AMAT also has great financials so this can be a long term hold for me. But I like the setup.
That's it for the beginners. This is a straightforward way you can use to find really good stocks for swing trading. In some other tutorial, I'll discuss intraday trading.
Let me know if you like these types of threads.
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Why do darkpool levels work? and why do we care about them? A thread 🧵
You might have seen many of recent posts on DP levels & how well they could work as support / resistance levels. Why is that?
DP trades are filled off exchange at different price levels by big/smart parties
Let's assume we have a big darkpool level at 385, what happens when we reach towards that level from below 385, we could find some resistance.
Why is that? Because the smart money might go into a losing position if they had a short position at 385, and they'll come to defend!
That defending of price levels is why we hypothesize these levels form support and resistance. The bigger the amount put on a level, the bigger the support or resistance we can expect.
But we never know the direction of a darkpool trade, right? Correct, let's talk about that.
$TSLA drop from 250 all the way to 100 was fully anticipated by flow traders, it's a beauty! Here's a breakdown 🧵
- October start, we started seeing huge amounts of put buying, and call selling, both bearish signs
- Price dropped, but put buyers never stopped, only took profits
- As price dropped, there were occasional selling / profit taking from puts, but the total amount of puts bought has remained extremely high ever since October, look at the right side of the chart, green bars are put buying.
- Even last week, after a big gradual drop, those puts were still way too high, which is why I tweeted about this! Low and behold, what happens this week? A massive 25% drop within a week!
I'm not smart, these flow traders are, and they've made millions of dollars of profits!
$SPY Dark Pools and how I use them. First, each morning I ping the discord bot "Tr-dplevels spy" and apply the larger one's to my chart. Second, watching them each week you'll start to see a pattern. Numbers above/below may grow larger.
CONT:
If you look at the $380 level earlier last week, it was smaller. As the week went on, it grew. When I am watching price action, I'm looking for Dark pools to help indicate a Support or Resistance level. A case could be made that $380 is now a good sized support.
As the sessions progress, you'll start to notice some DP's shrink & some grow larger. At this point you can start to build your thesis of where some potential daily rejections/bounces might happen.
Let's talk about Santa Rally & look at the data to form opinions $SPY $SPX 🧵
1. Darkpools are neutral / slightly bearish. 2. Massive put flow last week, but could also force dealers to unwind & lead to rally on Friday. 3. Neutral / slightly bullish delta correlations!
Cont.
Since we're looking at a very short time frame, the most important data point here is the delta correlations which have gotten a bit positive for the first time in the last few weeks.
There's a tail i.e 5% probability of a 5-7% downward move, apart from that, it looks bullish.
My final takeaway based on the data I am seeing right now - I think we do get a small rally, but if flow remains as it is, the rally wouldn't be super big.
Short week and probabilities are centered around smaller moves (two big bars in the center), I don't expect a huge move.
I don't use the 7 day to make trades, but this is such a beautiful chart to show what's been happening. Flow traders loaded up on calls yesterday, we got the gap up, and now they're unloading all those calls.
Puts are flat! Why? comment below
To me, puts flat shows short term flow traders are not sure about any direction right now, which is why they are taking profits, but they are not buying puts or calls anymore, they're going in cash.
The chart above is 7 day only! Wanted to highlight short term flow.
I am not using it to make a trade, but I'm definitely using it to stay a bit cautious and make smaller plays.