medium · Order Flow Analysis absorption-exhaustion-imbalance
A trader is monitoring a pullback in Crude Oil (CL) toward a previously identified 'Stacked Buying Imbalance' zone at $72.50 - 72.55. As price enters the zone, the current 10-minute bar has a Δ of -800. At $72.52, the Footprint shows 500 contracts traded on the Bid and 150 on the Ask.
How should this data be interpreted regarding a potential long entry?
- Invalidate the long setup because aggressive sellers are currently in control and hitting the Bid.
- Monitor for the Bid volume to drop and buying imbalances to emerge within the zone to confirm defense.
- Immediately sell the market as the -800 Δ indicates the trend has reversed.
- Place a limit buy at $72.50 regardless of the current bar because the original zone was institutional.
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