Market Mode Oscillator for Trend and Rebound Phases
Summary
The Market Mode indicator adapts John Ehlers’ phase-based approach to classify market conditions. It applies a filter to the midpoint of each bar, smooths the resulting oscillator, and compares it with adaptive upper and lower thresholds. A move above the upper threshold is interpreted as an uptrend, while a drop below the lower threshold signals a downtrend. Readings between the thresholds are described as calmer conditions in which a rebound or trend change may develop. The indicator also marks threshold crossings and changes the oscillator’s display color by regime.
The document provides the calculation code and parameter settings, but no market examples, test results, or evidence that the signals forecast profitable trades. The interpretation of the middle zone is deliberately tentative, and threshold crossings may lag or produce false signals. The code therefore serves as a regime-reading tool to investigate, rather than a standalone entry or exit system; users would need to assess its behavior across instruments and timeframes.
Key ideas
- The indicator filters bar midpoint prices to create a smoothed oscillator.
- Adaptive upper and lower thresholds define the uptrend and downtrend zones.
- Values between the thresholds are treated as calmer conditions that may precede a rebound or phase change.
- Threshold crossings are marked visually, with colors indicating the oscillator’s regime.
- The document provides code but no tests demonstrating predictive or trading performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.