medium · Order Flow Analysis absorption-exhaustion-imbalance
You observe price at the session low in ES. Cumulative Δ is making a new low, but the current bar shows a large bid volume print (2,200 lots) at the low price that does not result in further price decline. The bar then closes higher.
What is the most likely outcome?
- A bullish reversal as the passive institutional buyer absorbed the final wave of aggressive selling.
- A period of 'Unfinished Business' as the 2,200 lots must be balanced by an equal number of ask prints.
- A false reversal, as large prints at a low typically signify 'Capping' by sellers to prevent a bounce.
- A trend continuation, as the cumulative Δ confirms that sellers are still overwhelmingly aggressive.
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