Elliott Wave Oscillator + Squeeze

The Elliott Wave Oscillator + TTM Squeeze indicator combines wave-based momentum tracking with volatility compression analysis to identify potential market reversals and explosive breakouts. This tool helps traders visualize Elliott Wave counts, spot momentum divergences, and detect high-probability expansion phases through a unified oscillator interface.

Usage

The tool is primarily used to identify momentum shifts and volatility cycles. Traders can interpret the various components as follows:

• Elliott Wave Oscillator (EWO): The histogram represents the momentum difference between short-term and long-term price action. Rising green bars suggest strengthening bullish momentum, while falling red bars indicate bearish strength. Divergences between the histogram and price often signal the end of a specific wave.
• Breakout Bands: These bands act as dynamic thresholds for the oscillator. When the histogram breaks above or below these bands, it suggests a strong impulsive move is underway.
• TTM Squeeze: Displayed as dots on the zero line, this feature identifies "Squeezes." Dark dots indicate a period of low volatility (compression) where Bollinger Bands trade inside Keltner Channels. Bright or white dots signal the release of the squeeze, often leading to a significant price expansion or "fire."

Details

The indicator calculates the Elliott Wave Oscillator by taking the difference between a 5-period and a 34-period Simple Moving Average (SMA). To improve visual clarity, the script includes a normalized gradient color function that transitions histogram colors based on momentum intensity.

The TTM Squeeze logic relies on the relationship between Bollinger Bands and Keltner Channels. Volatility is considered "compressed" when the standard deviation (Bollinger Bands) is less than the Average True Range-based volatility (Keltner Channels). This state typically precedes a significant directional move as the market returns to a high-volatility state.

Settings

Elliott Wave Oscillator

• Short Length: The period for the fast SMA (default is 5).
• Long Length: The period for the slow SMA (default is 34).
• Source: The price data used for calculations (e.g., Close).
• Color Up/Down: Customizes the colors for positive and negative momentum.

Breakout Bands

• Show Breakout Bands: Toggles the visibility of the impulse bands.
• Bands Color: Sets the color and transparency of the breakout lines.

Squeeze Indicator

• Show Squeeze: Toggles the zero-line squeeze dots.
• KC/BB Length: Sets the lookback periods for Keltner Channels and Bollinger Bands.
• KC/BB Multiple: Adjusts the multiplier for the channel/band widths to refine squeeze sensitivity.
• Squeeze Color: Sets the color for the compression dots.

FAQ

How do I interpret the zero-line dots?
The dots represent volatility states. Dark dots indicate a "Squeeze" (low volatility/compression), while white or bright dots indicate that the squeeze has been released, suggesting an expansion in price.

What do the bands on the histogram represent?
The Breakout Bands are dynamic levels calculated from the oscillator's history. When the histogram crosses these levels, it signifies an unusually strong momentum impulse, often corresponding to an Elliott Wave 3.

How can I access this script?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.