medium · Order Flow Analysis absorption-exhaustion-imbalance
In ES, price is trading at $4,540.00, which is $1.5 σ (standard deviations) above the VWAP. It touches the overnight high. A 5-minute bar shows a 'Wick-Body Imbalance' setup: buying imbalances in the upper wick and a stacked selling imbalance in the red body.
What is the confluence score for this short?
- Low confluence, because the market is trending up and the VWAP is too far away.
- Conflicting confluence, because the wick imbalances suggest buyers are still aggressive.
- Neutral confluence, as overnight levels lose relevance after the first hour of RTH.
- High confluence, as it combines a key level, statistical extreme (VWAP), and multiple bearish footprint signals.
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