Squeeze Divergence Catalyst RCT

queeze Divergence Catalyst RCT

The "Squeeze Divergence Catalyst RCT" is an advanced Pine Script indicator designed to identify potential trend reversals by pinpointing classic and hidden divergences on the Squeeze Momentum oscillator. Building upon the foundational Squeeze Momentum concept, this tool integrates robust divergence detection algorithms to highlight discrepancies between price action and momentum, which often signal weakening trends or emerging opportunities.

Core Features:

Squeeze Momentum Oscillator (sz): Calculates and displays the core Squeeze Momentum histogram, representing the difference between price and its moving average relative to market range, smoothed by a linear regression.
Squeeze State Detection: Visualizes different market compression levels (High, Mid, Low Squeeze) using configurable Bollinger Bands and Keltner Channels, indicating periods of consolidation or potential breakout.
Advanced Divergence Detection: Employs sophisticated logic to automatically identify both regular (classic) and hidden divergences between the Squeeze Momentum oscillator (sz) and the price (highs/lows). It includes options for using data from two pivot points for more robust signals.
Visual Clarity: Divergences are clearly marked on the chart with colored lines connecting the price and oscillator pivots, accompanied by labels ("R" for regular, "H" for hidden) for easy identification.
Configurable Parameters: Offers extensive customization for divergence detection, including pivot lookback periods, minimum/maximum range for pivot detection, and toggles for plotting different types of divergences (bullish, bearish, hidden).
Repainting Control: Includes an option to delay the plotting of divergence signals until the candle is closed, reducing the chance of repainting and increasing reliability.
Built-in Alerts: Generates alerts when regular or hidden bullish/bearish divergences are detected, allowing for automated notification.
Purpose:

The indicator aims to act as a "catalyst" for traders by providing early warning signals (divergences) within the context of Squeeze Momentum analysis. It helps traders spot potential turning points where the underlying momentum (as measured by the Squeeze oscillator) fails to confirm new price extremes, potentially indicating a loss of trend strength and an opportunity for a reversal or pullback.