A trading commentary analyzing liquidity traps and price action around the New York stock market open. The speaker explains how spikes at the open clear liquidity and induce buyers who become trapped, which in turn creates more liquidity below recent lows and offers potential short/buy-after-break entry opportunities once liquidity is taken.
Approaching stock open. We have respected the lows to the left hand side. This is at New York open. We've gone long, very, very choppy price action before stock open. Finally, stock open occurs, spike up, clearing internal liquidity. Now why is this important? If I open this up to the one minute chart, yes, we have taken liquid from the left hand side, but this also induces buyers. So again, same concept, they're going to be looking to buy this thing. So you can even see, look how the market gives them the reaction here. Anybody that bought down here, they get the reaction up and then they get trapped. And all that is, is just building more and more liquidity below these lows. And of course below to the left hand side, drag that over, see stock open, again, spike up, inducing buyers and then traps them. Now that we're trading below all the liquidity, this is now when I want to be looking for entries. But how can I take an entry off this? Again, I want to see some sort of level of liquidity taken. If you look right down here, look what happened. And I believe this was the day before in New York. We spiked out these lows and never returned back. This whole area here is definitely an area I can look to see if buy from.
