The DOM is the single most important tool in the Prop trading World. However it’s essentially telling the same tale as the tape with the exception that as well as whats printing we have the Depth pf market.
10 Year Notes Absorption and Backtick
Price has been moving down and suddenly we see absorption on the Bid at 070. Every time the bid is cleared the buyer immediately sweeps the offer as it steps down and nothing gets through to 065.
This is our first heads up that a buyer is interested here. however the Seller takes the 070 Bid and brings 2000 down on the offer. Only 38 trade into the next price however before the buyer sweeps the offer indicating he;s still in play.
The Buyer then takes out the next offer at 075 and places size on the Bid. This is the first time he has lifted to consecutive offers and likely the start of his press. We then have a pattern of offers pulling off and the buyer sweeping and stacking the bid until we reach 085. The seller sweeps the buyers Bid at this level which is the first indication of Balance. Time to take profit if long.
