I don’t hear many people talk about the Dark Pools Index, but here is a quick introduction. If I am understanding it fully, and that is a big IF, it is an attempt by a market researcher (who can be found on twitter under the handle @Squeezemetrics) to hazard a guess at the buying and selling demand being processed by market makers. I’m sure I cannot explain it fully and you would be better off reading the white paper at squeezemetrics.com. It is a quick five minute read and very interesting. All data is freely downloadable to play with as you please.
Generally speaking, when the DIX (Dark Pool Index) moves to the upper extremes, dark pool buying is a primary influence. When the DIX moves to the lower extremes, dark pool selling is the the primary influence. See for yourself.(more…)