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00days 00hours 00minutes 00seconds 2020-12-25 12:00 AM     00days 00hours 00minutes 00seconds 2020-10-25 12:00…

At these levels, it’s getting a whole more difficult to trade the market. We went from a potential gap down as geopolitical tensions rose… only for the “buy the dippers” to rush in and push the market to all-time highs.

The market has sure stumped a lot of traders. Right now, I think it’ll be detrimental to your psychology and trading account if you decide to get heavy on either side of the market.

As a trader, I’m neither a perma-bull or a perma-bear, I just want to make sense of the market and what exactly is going on. We all know the market is fragile right now, and the tides can turn very quickly. 

For the most part, I’m sticking to my guns — following the paper trail of Wall Street’s largest players.

Why am I only looking for dark pool trades?

Well, they work in any market environment — bullish, bearish, or choppy — following the smart money is effective.

 

 

If you’re underperforming the market, you’ll want to check out why you need to be looking at dark pool information.

 

The Smart Money Stays Winning

 

I think the best way for you to learn how dark pools work is by providing you with a real-money trade example. You see, the Wall Street insiders look for ways to cover their tracks. Many times, they have access to non-public information, better technology and research… you name it

The smart money has an unfair advantage.

However, I’ve figured out a way to level the playing field. All I have to do is look at the order flow going off in the dark pools using a proprietary scanner… then look to the charts.

It’s really that simple.

Don’t believe me?

Yesterday, I sent my clients out my watchlist with my potential dark pool plays. 

MRK – 2m at 88.65 – Jan 17th $89 Calls watching close in the morning for a potential trade

Heck, I even let them know Merck &  Co. (MRK) was my favorite setup.

Why?

Well, someone dropped a whopping $177.3M on the trade! I don’t know about you, but that’s a massive trade in my eyes… and I don’t think someone is throwing down a massive bet like that if they’re not confident it’s going to pop.

When I looked to the daily chart, MRK it was an interesting setup.

 

 

MRK sold off a bit earlier this week, but it hit a key support level. The reason for the sell off: MRK’s Keytruda drug missed key data points in a pivotal study. The drug failed to produce survival benefit for a study with small cell lung cancer. 

However, if you know anything about drug companies like Merck… they’re so massive that a headline about one of their treatments shouldn’t move the needle a whole lot. In fact, the following day, Merck actually received FDA approval for its bladder cancer treatment.

That said, I figured the bullish news would overshadow the negative news from the other day, especially with the market ramping higher.

When I saw a large player hammer MRK shares at $88.65, I just knew I had to keep an eye on it.

Why?

The trade went off right at a key support level, and I realized the smart money had a great idea. 

So what did I do?

I followed suit.

 

 

Shortly after, I was sitting in some hefty profits, and I locked in a 54% winner on half of my position (keep in mind, I’m holding on to the rest and am still in the calls, but I’ll be sure to let my clients know once I sell them).

 

 

The thing is, I wasn’t the only one who profited from this trade… many of my clients also locked in a monster winner.

 

jeez MRK ST up 25% ~ Lee S.

first 1/2 of MRK calls sold +30% Thx Taylor ~ Gary T.

MRK st up at 38%, will trail out at 50% ~ Ben E.

first half of MRK out at 50% ~ Ben E.

second 1/2 of MRK sold +45% Thx again Taylor ~ Gary T.

Thnx Taylor I’m back over 10k! ~ Mark S.

Out at +50% on MRK…thanks, TC! ~ Chad E.

had a trailing stop on MRK as I had to step away, got 46.2%, thanks Taylor! ~ Kevin S.

 

If you’re having trouble finding trades in this market environment, then dark pool trades may be the solution. Click here to learn how you can effortlessly generate trade ideas and piggyback off Wall Street’s largest players.

 

Author: Taylor Conway

Taylor’s Shadow Trader system allows his subscribers to tap into the hidden corners of Wall Street and to capitalize on “dark pool” trading activity. This powerful "follow the big money" strategy uncovers large trade activity that most regular investors have no access to, but that Taylor’s subscribers receive alerts about. Starting with a small account and trading part time, Taylor rapidly built his personal trading millions using his own proprietary trading systems. Sharp, savvy, and highly driven, Taylor looks for profits in any market condition, bull or bear.

Longfin Rides Lies All The Way To The Nasdaq and Robs $33M

 

If you’ve been in the markets long enough, you should know there is a lot of shady activity that goes on in the markets… no matter where you look, there are scummy players. The thing is, I like to look into these players to see how they operate.

That way, I can figure out what’s going on, and legally profit from their greed. 

I’ve come across an interesting story about Longfin — a blockchain company — that everyone and their brother wanted in on at one point. Little did they know, the company was riddled with people who would stop at nothing.

CEO and Founder Venkata S. Meenavalli took his company Longfin (LFIN) on a rollercoaster ride. The company went from being listed on the prestigious Nasdaq exchange… and actually traded for more than $140 a share at one point.

After the CEO’s fraudulent activity, Longfin had to head on over to the wild wild west — the OTC Markets — where the stock currently struggles to stay above the price of an off-brand canned soda.

 

 

What was his total score? A whopping $33 million in sales of shares at “zero” cost. What the CEO didn’t know was the fact that the SEC hunts down shady execs to help investors.

Of course, that’s not how things were planned…

Longfin’s goal was to trade on the Nasdaq. While many movies and books talk up the “do whatever it takes” ideology, that isn’t the way to go when you don’t want the SEC to slap you with charges.

The Debacle of Longfin

 

Here’s how the tides turned for Longfin.

Longfin distributed 400,000 shares to people close or affiliated with the company to create the illusion there were bona fide investors interested in LFIN.

However, these investors never had to pay for these shares… talk about a free lunch.

So why did they distribute these shares out?

They wanted to falsely inflate investor numbers because that’s one requirement to be listed on a major exchange.

Longfin added another layer of complexity to this scheme. You see, it was crucial for Longfin to qualify for the SEC’s Regulation A guidelines — the company had to be based in the U.S. or Canada.

Get this: Longfin claimed that it was based in New Jersey and New York but never operated or managed in the US! The company even placed all management, cash, assets, and records exclusively outside the US.

After meeting some of the requirements, Longfin needed to be trading over $5 a share. To do so, Longfin used the same plan: distributing shares to insiders and company affiliates that not one single person paid for.

Thereafter, LFIN was finally listed on Nasdaq. Longfin bought Ziddu.com a cryptocurrency business… which surprise surprise, 92% of Ziddu was owned by no other than the CEO and founder of Longfin, Venkata S. Meenavalli.

Longfin’s Stock Manipulation

 

This actually hyped up the stock because this was going on during the whole cryptocurrency craze. However, Ziddu.com actually had zero actual value. The company had no revenue, no physical facilities, no employees even, basically were a big nothing with a side of nada.

But this acquisition did one thing and it was the key to everything.

The acquisition launched Longfin’s stock price to $142.82 per share, which was perfect for the insiders and company affiliates. They had tons of shares they never even spent a penny on, and they just had to sell their shares.

Here’s the kicker: they made millions of dollars off the spike from Ziddu.com. Longfin, Meenavalli, and 3 affiliates made more than $33 million from selling their essentially “free” Longfin shares.

It wasn’t enough for these schemers after they raked in $33M. Instead, they moved onto accounting fraud. The company falsified purchases, sales, shipments — all to create the impression of revenue-generating transactions. By doing this they created $66 million of fake revenue, which at the time, amounted to 89% of the total revenue for Longfin.

Longfin and Meenavalli made false report after false report and publicly disclosed its revenue

In 2018 Longfin tapped out.

It disclosed to its board directors that operations would cease, and liquidation of assets would begin. Longfin filed that its liabilities far exceeded its assets (no duh). It didn’t have enough cash to meet obligations. Not only that, but the company anticipated that there would be no recovery for shareholders.

Longfin, Meenavalli, and the 3 affiliates that helped him will be paying a settlement of $26M for their ill-gotten gains. The SEC hopes to distribute the settlement to the investors these jerks royally screwed over on their way to get themselves millions.

Meenavalli will also be required to turn over every share of Longfin. He will be permanently barred from acting as a director or officer of any public company. He will also be banned from participating in the sale or offering of penny stocks.

Good riddance!

Yes, You Can Profit Off Shady Activity

 

The thing is, if there’s shady activity going on in a major exchange in Nasdaq… imagine what goes down in the dark pools.

Just check out a recent trade I had in Virgin Galactic (SPCE).

 

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Not too long after, the Halftime Report crew featured the trade in SPCE! 

 

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Guess what happened with the stock that day?

 

 

The thing is, the CNBC Halftime Report crew was a little behind… we spotted the trade before it even got a mention!

 

Since I was sitting in some hefty profits, I decided to take some off the table…

 

 

But I wasn’t the only trader out there wise enough to lock in the profits… many of my clients crushed the trade too!

Just sold SPCE calls for +36% Thx Taylor! ~ Gary T.

Same here Gary out SPCE +38%, Thanks Taylor ~ Dave

same here for 40%, excellent… ~ Lee

+50% on SPCE ~ Robert

 

Heck, I was able to lock in +50% gains on half the trade in under three hours and I will continue to down big-money block trades that go off in Wall Street’s mysterious dark pools… and then using those “hidden” smart-money signals to collect quick profits from fast stock moves.

With earnings season coming up, I think we’ll see much more activity going off in the dark pools… and I’ll be stalking these trades — waiting for the right time to pounce.

If you want to learn how you can profit off Wall Street’s greed, click here to watch this exclusive training lesson.

Author: Taylor Conway

Taylor’s Shadow Trader system allows his subscribers to tap into the hidden corners of Wall Street and to capitalize on “dark pool” trading activity. This powerful "follow the big money" strategy uncovers large trade activity that most regular investors have no access to, but that Taylor’s subscribers receive alerts about. Starting with a small account and trading part time, Taylor rapidly built his personal trading millions using his own proprietary trading systems. Sharp, savvy, and highly driven, Taylor looks for profits in any market condition, bull or bear.

The SEC is supposed to be the financial watchdog and protect everyday traders like you and me…irconically they help Wall Street’s largest funds get the upper hand.

Case and point — between 2010 and mid-2014, ITG omitted important structural features of one of its dark pools, splitting the trading venue into two separate pools. 

In essence, this prevented certain orders in those pools from interacting with each other.

Now, ITG did not disclose these pools. 

Not only that, but ITG did not ensure the information was protected. You see, dark pools were designed for Wall Street’s largest players—allowing them to hide their trades and execute their orders covertly.

The SEC uncovered the fact that between mid-2014 and late 2016, ITG did not disclose it applied a “speedbump” that slowed down interactions from certain high-frequency trading (HFT) firms. 

Here’s the kicker…

 

SEC Fines ITG and Al

 

ITG disclosed the confidential dark pool trading information from its clients. Every day, the firm sent out its Top 100 Reports that outlined the previous day’s trading activity. If you were able to get your hands on that information, it would’ve been very easy to put the pieces of the puzzle together.

These reports contained valuable information that identified the top 100 stocks for which orders were executed. Essentially, the trading firms would be able to use those reports to detect unsatisfied liquidity needs… and ITG assured its clients it would not disclose their trading intentions. 

ITG and its affiliate AlterNet Securities Inc. agreed to pay $12M to settle the charges, and they were hit with a cease and desist from committing or causing any future violations. Basically, they violated the antifraud provisions and rules governing the requirements for dark pools.

I don’t know about you, but a $12M fine for making information available isn’t a big deal to me.

As you can see, the SEC protects dark pool users, and it seems a little shady to me. We all know how Wall Street is filled with scummy traders who place bets on non-public information, and many times they use dark pools to trade covertly.

 

How To Use Dark Pool Information To Your Advantage

 

Sure, the SEC fined ITG and AlterNet for disclosing dark pool information. However, it’s not actually illegal for us to trade off that information. You see, there are special filters out there that detect massive block trades that go off on dark pools. This helps us effortlessly generate trade ideas, and legally steal ideas from the large banks on the street.

In order to spot these trades, I use a proprietary scanner.

For example, I noticed an interesting order that hit the market in Virgin Galactic Holdings Inc (SPCE). One whale came in and bought up 560K shares of SPCE at $10.20 in a dark pool. That signaled to me the stock could run higher.

 

 

When I see a massive options order go off on the dark like SPCE, I place it on my watchlist… waiting for the perfect entry. Just a few days later, I saw more block trades hit the market and figured something was up. It could’ve been the same player from earlier scooping up more shares of a potential catalyst, who knows. It was an interesting play for sure, so I decided to put the trade on.

However, I didn’t buy the stock… I decided to stick to the options because it provides me with more leverage and allows me to generate high returns, fast.

 

 

Since this was a strange play, I decided to size my trade a bit smaller than usual, just in case things went sour. 

Here’s what the stock did after I got into the trade…

 

 

I alerted the trade on Dec. 27, and it started to trend higher all day!

As you would expect, the calls were running up that day… and it got right to my profit target! When I hit my profit targets, I think it’s a good idea to take some off the table, and let the rest ride. Remember, just someone decides to sell half, it doesn’t mean you have to follow suit.

Maybe you’re satisfied with locking in the entire position for 50%. Do what makes you feel comfortable.

 

 

I decided to hold the rest to try to juice some more profits out of it… but no cigar. However, it was still a very nice trade overall. Here’s a look at what I sent out to my clients when I closed out the last portion of the trade.

 

 

That’s the power of using dark pool information, and my clients are finding a lot of success with my strategy.

Just sold SPCE calls for +36% Thx Taylor! ~ Gary T.

Same here Gary out SPCE +38%, Thanks Taylor ~ Dave

same here for 40%, excellent… ~ Lee

+50% on SPCE ~ Robert

There are a plethora of trades going off in the market just like these… and all you need to do is be there to execute the trade. If you want to start profiting off Wall Street’s greed, click here to see how to do just that.

Author: Taylor Conway

Taylor’s Shadow Trader system allows his subscribers to tap into the hidden corners of Wall Street and to capitalize on “dark pool” trading activity. This powerful "follow the big money" strategy uncovers large trade activity that most regular investors have no access to, but that Taylor’s subscribers receive alerts about. Starting with a small account and trading part time, Taylor rapidly built his personal trading millions using his own proprietary trading systems. Sharp, savvy, and highly driven, Taylor looks for profits in any market condition, bull or bear.