As we got near the London close we could see a shift in flows. A lot of profit taking took place near the prior day open.
In the replay below notice how buyers are reloading on the bid after breaking above 16 (prior bar high). Imbalance on the footprint as well.
The pace had slowed down a bit as we set that LOD but the relative volume was decently high during the reversal. It was 2.5X higher than normal. We also saw absorption below prior bar lows and high positive deltas on the bar that started the reversal.
What’s important isn’t the exact reason for the shift in flows. That doesn’t matter as much. What’s more important is to be on the side that’s winning regardless of why they are winning.
I was long-only after seeing this. Why would I want to short against large shorts who are exiting the party? Not too appealing.
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