Dual-Phase Reversal: Exhaustion Counts, Pivots, and Volume Pressure

Summary

This indicator framework combines a nine-bar momentum setup with a thirteen-count terminal phase modeled on DeMark-style exhaustion logic. The first phase compares closes with those four bars earlier; the second counts qualifying closes beyond the two-bar-back extreme and can pause when a bar fails its test. Qualification rules require the sequence to keep extending at key points. The study also marks support or resistance and invalidation levels from completed sequences, calculates weighted range pivots from a higher timeframe, and measures directional volume pressure as a percentage of buying versus selling activity.

The intended use is confluence: an exhausted count near a pivot, accompanied by weakening volume pressure, can support a reversal hypothesis. Counts are confirmed only on closed bars, and the document cautions that they are not standalone trade signals; strong trends may continue after an exhaustion count. Invalidation levels identify when the premise has failed, but do not determine account-sized stops. No performance results or empirical validation are provided.

Key ideas

• A nine-bar setup compares each close with the close four bars earlier and requires a direction change to start a new sequence.
• The terminal phase counts qualifying closes toward thirteen and includes a further extreme test for its final bar.
• Completed phases leave support or resistance and invalidation levels that help define when the reversal premise fails.
• Higher-timeframe weighted pivots and volume pressure add context to exhaustion counts.
• The framework is presented as a confluence tool, not a standalone signal, and supplies no performance testing.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.