Why does price often test the NY Midnight Open during the US Session?

This phenomenon is tied to market structure and liquidity cycles:

Liquidity Anchoring
The New York Midnight Open represents the start of the new trading day on the institutional calendar (00:00 ET). It becomes a reference anchor for large traders, algo models, and volume profile algorithms.
Asia–London–NY Flow
By the time the US session opens (9:30 AM ET), price has usually moved in reaction to Asia and London flows. These moves often become imbalanced. The market then uses the midnight open as a “mean reversion” or equilibrium level.
Market Psychology
Retail traders often overreact at the open. Meanwhile, smart money uses key levels like Midnight Open to trap liquidity, reset direction, or test conviction.

✅ It’s very useful, but context matters:

High Reliability when:
- The Midnight Open aligns with VWAP, key Fib levels, or high-pressure zones.
- Price sharply diverged overnight and US session needs rebalancing.
- Price respects the level with a clean test (wick + bounce/drop).
⚠️ Lower Reliability when:
- Price is consolidating with no directional conviction.
- There is high-impact news (like CPI, FOMC) that causes chaotic moves.
- It’s Friday (liquidity dry-up risk).

Use the Midnight Open as a confluence level—not a stand-alone signal.
Wait for price to touch, reject, or flip the level during the first 30–60 min.
Combine it with:
- 30s or 1m SwingArm Pressure
- VWAP bounce or break
- High Pressure trendline breaks or candle flips

🧠 Key Insight:
When price pulls back to the NY Midnight Open and aligns with pressure, it often sets up a low-risk, high-reward trade.

Confluence matters — whether it’s a SwingArm zone, pressure trendline, or extreme Fib level, the more alignment, the higher the probability.