1st Gray Cross Signals ━ Histogram SQZMOM

The 1st Gray Cross Signals ━ Histogram SQZMOM indicator provides a visual representation of volatility squeeze states combined with linear regression-based momentum to identify high-probability entry points. It builds upon the classic Squeeze Momentum concept by specifically highlighting the initial "squeeze release" signals to find points of interest based on John F. Carter's momentum strategies.

Usage

The indicator is primarily used to identify periods of consolidation (the squeeze) and the subsequent explosive moves (the release).

• Momentum Histogram: The central histogram displays the direction and strength of momentum. Bright colors indicate increasing momentum, while darker/faded colors suggest a potential reversal or weakening trend.
• Squeeze Dots: Small crosses on the zero line indicate the squeeze state. Black/Foreground dots indicate a squeeze is active (Bollinger Bands are inside Keltner Channels), while gray dots signify a squeeze release.
• Background Highlights: The script automatically highlights the "1st Gray Cross" signal. A green background highlight appears when a squeeze releases while momentum is positive, suggesting a long entry. A red background highlight appears when a squeeze releases while momentum is negative, suggesting a short entry.

Details

This tool is a refined histogram version of the Squeeze Momentum indicator. It calculates the relationship between Bollinger Bands and Keltner Channels to detect low volatility periods. The momentum component is derived from a linear regression of the price relative to the average of the Donchian midline and a Simple Moving Average (SMA).

The specific "1st Gray Cross" logic is inspired by Chapter 11 of John F. Carter's "Mastering the Trade," focusing on the very first bar where volatility expands after a period of compression. This version keeps the main chart clean by strictly using a bottom-pane histogram and background highlights.

Settings

Alternate Source

• Source: Determines the input data used for all calculations (default is Close).

Bollinger Bands

• Length: The lookback period for the Bollinger Bands calculation.
• MultFactor: The standard deviation multiplier for the width of the bands.

Keltner Channel

• Length: The lookback period for the Keltner Channel calculation.
• MultFactor: The multiplier applied to the range to determine channel width.
• True Range (Keltner Channel): When enabled, uses Average True Range (ATR) instead of a simple high-low range.

Visuals & Bands

• Plot Histogram: Toggles the visibility of the momentum histogram.
• Plot Crosses: Toggles the visibility of the squeeze state crosses on the zero line.
• Toggle (Bands): Enables horizontal reference levels on the histogram pane.
• Longs/Shorts Highlights: Toggles the background coloring for the 1st Gray Cross signals.

FAQ

How do I interpret the histogram colors?

Bright green indicates rising positive momentum, dark green indicates falling positive momentum. Bright red indicates falling negative momentum, and dark red indicates rising (reversing) negative momentum.

What is the "1st Gray Cross"?

It is the first bar where the Bollinger Bands expand outside of the Keltner Channels after being inside them. This "release" often signals the start of a trending move.

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.