The S&P 500 saw significant dark pool prints last week, suggesting a potential bullish sentiment amid recent bearish trends. Notably, a $3.6 million out-of-the-money call set to expire this week stands out. Highlighted in purple, this order involves 16,000 contracts. Another notable transaction includes a $1.7 million call order for the 552 strike, also out-of-the-money, with a September 30 expiration. Such unusual options activity contrasts sharply with last week’s aggressive three-day sell-off.

These bullish prints, amid a backdrop of uncertainty and market pullback, warrant closer examination. Observers should note the previous trading range on the S&P 500, characterized by notable resistance and support zones. The market's breakout above this range on June highs around 550, followed by a recent retest, hints at a possible significant upward move, potentially reaching around 560 if the current support level holds. This scenario presents a counter-narrative to the prevailing bearish sentiment, suggesting a long setup with risk management around the 547 level.

Furthermore, the unusual options activity seen last week should be monitored closely this week. It's essential not to mimic these positions blindly but to observe the actions of these market whales. Historical data indicates that such aggressive prints often succeed, making them critical for market analysis this week.

Volatility Spikes as Market Reacts to Biden's Withdrawal

Switching gears, the VIX, the market's volatility index, saw a notable spike last week. A breakout from a downtrend on Monday led to further upside, reflecting market hedging in response to uncertainties, including President Biden’s withdrawal from the race and an increase in volatility during Opex week. This hedging might be an overreaction, potentially supporting a bullish thesis for the S&P 500 if the VIX begins to calm down.

The unusual options activity and corresponding dark pool prints point towards significant market movements. Traders should keep an eye on these developments, as they could indicate a shift in market sentiment. The S&P 500's current position at the top of a previous range suggests that if the support holds, there is potential for a significant rally. This insight is critical for those monitoring the impact of dark pool trading on market trends.

Key Support Levels to Watch in QQQ and IWM

Shifting focus to the QQQ, it hovers around a critical support level. A breach below this level could lead to a gap fill down to approximately 468, highlighting the necessity of maintaining above 473. Meanwhile, the IWM has demonstrated relative strength after breaking out from a supply zone, suggesting a potential retest around 210 if QQQ bids this week. Such a retest would present a favorable long setup, bolstered by bullish flow.

Conclusion

In summary, the S&P 500 and QQQ are at pivotal junctures, with unusual options activity and key support levels indicating potential upward movements. Concurrently, the IWM presents a future-oriented long setup on a retest. As always, staying ahead and prepared for market shifts is paramount.

For more insights on dark pool trading and unusual options activity, stay tuned and keep a close watch on these significant market movements.