medium · Order Flow Analysis absorption-exhaustion-imbalance
During a FOMC announcement, the price of ES spikes 20 points, then drops 15 in 90 seconds. A trader sees a 'clean' bar at 2:05 PM with stacked selling imbalances at the spike high and a COT at the top.
What does this indicate?
- Institutions are selling the news into the initial retail panic
- A gap-and-go initiative buy is forming
- The market is entering a trend-continuation phase higher
- The auction at the high is unfinished and will be retested
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