Divergence of DecisionPoint Breadth Swenlin Trading Oscillator [LazyBear]

The Divergence of DecisionPoint Breadth Swenlin Trading Oscillator [LazyBear] indicator tracks market breadth using internal exchange data to identify potential market reversals through price and oscillator divergences. It offers a sophisticated view of market strength by analyzing the relationship between advancing and declining issues across major indices.

Usage

The indicator is primarily designed for use on the Daily time frame for stocks and indices. Users can monitor the Swenlin Trading Oscillator (STO) alongside price action to spot exhaustion or momentum shifts.

• Regular Bullish Divergence: Occurs when price makes a lower low but the STO makes a higher low, signaling potential upward reversal.
• Regular Bearish Divergence: Occurs when price makes a higher high but the STO makes a lower high, signaling potential downward reversal.
• Histogram Analysis: The histogram provides a visual representation of momentum; green/red bars indicate strength in the respective direction, while orange bars indicate a potential cooling off in the current trend.

For optimal results, traders often wait for a "Bull" or "Bear" label to appear and confirm the price action for a few candles before executing a trade.

Details

This tool calculates the DecisionPoint Breadth Swenlin Trading Oscillator by taking the ratio of (Advancing - Declining) / (Advancing + Declining) stocks. This ratio is then smoothed using an Exponential Moving Average (EMA) and a Simple Moving Average (SMA) to create the oscillator line.

The divergence logic uses pivot points (pivothigh/pivotlow) to compare price extremes with oscillator extremes within a specific lookback range. By fetching data from exchanges like NYSE, NASDAQ, and AMEX via request.security, it provides a broader market perspective than price action alone.

Settings

Breadth Data

• Market: Selects the data source (0 = Combined, 1 = NYSE, 2 = NASDAQ, 3 = AMEX, 4 = Custom).
• CUSTOM Advancing/Declining Symbols: Allows users to input specific symbols if the "Custom" market option is selected.
• Show Histo: Toggles the visibility of the momentum histogram.

Divergence Configuration

• Pivot Lookback Right/Left: Sets the number of bars required to confirm a pivot point.
• Max/Min Lookback Range: Defines the window size (in bars) to search for divergent peaks or valleys.
• Plot Bullish/Hidden Bullish: Toggles the detection and labeling of bullish divergence types.
• Plot Bearish/Hidden Bearish: Toggles the detection and labeling of bearish divergence types.

FAQ

How do I use this indicator? You can use it to identify market turning points on daily charts by looking for "Bull" or "Bear" labels which indicate a divergence between breadth momentum and price.

Can I use this on intraday timeframes? While the script includes logic to handle different periods, the underlying breadth data is most reliable and traditionally used on the Daily (D) timeframe.

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