medium · Order Flow Analysis absorption-exhaustion-imbalance
The ES makes a new high on a bar with +2,100 delta. The next bar retests the high but shows only +200 delta and 30% of the previous bar's volume. Price fails to exceed the high and closes lower.
What is the narrative here?
- A 'bullish flag' formation, where the lower volume indicates a healthy consolidation before the next breakout.
- An incomplete auction, as the second bar did not reach the exact same tick as the first.
- Institutional accumulation, as large participants are trying to buy at lower prices after the initial spike.
- A 'probe and fail' or retest-on-weakness, confirming the initial high was a point of exhaustion for buyers.
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