medium · Order Flow Analysis absorption-exhaustion-imbalance
A trader is monitoring the Initial Balance (IB) in the ES. After 30 minutes, the range is $4520 to $4528. At 10:05 AM, price breaks above $4528 with stacked buying imbalances and a delta of +2,500.
What is the multi-chart interpretation?
- This is initiative buying signaling a 'bullish day' profile; look to buy pullbacks to the IB high ($4528).
- The trader should sell at $4528 because the break of the IB is usually a false 'stop run' by HFTs.
- The high delta suggests the move is overextended and a 'gap fill' toward the previous day's close is imminent.
- This is responsive activity, as the market is testing the extremes of the overnight range.
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