Using Pivot Range Changes to Classify Market Sentiment

Summary

This indicator compares the current period’s first support and resistance levels with the prior period’s levels, which are calculated from highs, lows, and closes. When both levels rise, it labels sentiment bullish; when both fall, bearish. A higher resistance level paired with lower support marks an outside range and possible elevated volatility, while lower resistance with higher support marks an inside range and possible indecision. Bar colors distinguish these categories and whether the prior session was bullish, bearish, volatile, or indecisive.

The accompanying platform script adjusts which daily bars it uses around week boundaries and plots the categories as a histogram. The author suggests outside and inside ranges may precede changes in direction, but provides no backtest or evidence for predictive value; a related strategy is described as still undergoing forward testing. The indicator is presented as usable across markets and time frames, but its interpretation and calendar handling may need adaptation to the instrument and platform.

Key ideas

• The indicator classifies sentiment by comparing current and prior pivot support and resistance.
• Rising pivot levels are treated as bullish, while falling levels are treated as bearish.
• Outside and inside pivot ranges are interpreted as possible volatility or indecision.
• The histogram uses color and bar length to distinguish prior-session conditions.
• The document offers no validation results and describes directional predictions as possibilities.

Tags

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