Schabacker's Gold Trap Inside the Trap: Schabacker Congestion, VWAP Warfare & The Silent Distribution on XAU/USD
1. The Congestion Area – Schabacker Style
🔍 What We Saw:
Price action rotated in a tight range: 3,324.5 - 3,329.5.
This is not random. This is Schabacker’s classic Congestion Zone:
Duration: 12+ hours
Width: ~5 points
Volume: tapering near edges
Failed breakouts on both sides = classic neutral wedge compression.
🎯 Schabacker Teaching Applied:
"Congestion areas are places of rest and preparation — they are the breeding grounds of significant breakouts or breakdowns."
From his bible “Technical Analysis and Stock Market Profits”:
Congestion after a trend → likely a continuation (but confirm via breakout volume).
Multiple failed breakouts = deceptive strength/weakness → traps.
Range becomes psychological equilibrium → breakout from this zone is explosive.
📘 Lesson:
Watch for breakout confirmation only AFTER price escapes the congestion and retests the range (confirm with volume and delta). If volume weakens and price returns inside = fakeout, fade that sh*t.
🔥 How Schabacker Explains July 29 Price Action
"This was a classic congestion scenario with symmetrical compression, rejecting value high and value low over and over — a balanced market ripe for an imbalanced expansion."
Price coiled with lower highs + higher lows inside the value zone = triangle-like congestion.
Breakout attempts both sides failed = energy stored.
Delta flipped negative toward the close + volume dried = distribution inside the congestion.
✅ Congestion was not random chop. It was the Smart Money disguising their exit before slamming price.
⚔️ ENHANCED STRATEGIC OUTLOOK FOR TODAY (JULY 30, 2025)
🎯 Bias: Short bias unless proven wrong by breakout + acceptance above 3,329.50
Schabacker’s congestion broken to the downside = high probability short trigger.
First target = edge of congestion zone @ 3,316.80 (previous VAL).
Second target (extension) = swing low anchor near 3,310.
📘 Volatility Note:
After tight range like this (Schabacker Box), volatility expansion is imminent. Don’t get caught trading inside — trade the break and retest.
💣 HYPOTHETICAL TRADE PLAN: SCHABACKER STRATEGY IN PLAY
Order Type: 🔻 Sell Stop Below Congestion Break
Entry: 3,322.00
Stop Loss: 3,330.00 (above congestion top + failed breakout zone)
Take Profit 1: 3,316.80 (edge of range, VAL)
Take Profit 2: 3,310.00 (target from congestion width projection)
Confidence: 78%
🧠 Justification:
Factor Explanation
VWAP Flatlined = balanced market
FVRP Price camped near POC = equilibrium
Footprint Absorption at highs, silent selling = distribution confirmed
Delta Early buyer strength flipped = trap
Schabacker Congestion Classic box breakout setup = timing the expansion
🧠 EDUCATIONAL SUMMARY — WHAT YOU JUST LEARNED
✅ Schabacker’s Congestion Area Tactics
Congestion after a move Leads to continuation (trend resumes after pause)
Multiple failed breakouts Traps traders = setup for fakeout fade
Volume dries inside box = Explosive breakout likely
Use congestion width To project breakout targets
You don't fade chop — you exploit it after the breakout.
Don't waste your bullets inside the box. Wait for the beast to break loose — then you unload.
