Adaptive Sharp Momentum

█ Introduction
The Adaptive Sharp Momentum Study has the following all-in-one features:
 • A noise-free, trend-following indicator.
 • Automatically detects implied tops and bottoms within fast price cycles.
 • It identifies price consolidations and periods of indecision; often challenging to spot.
 • Includes a unique feature for detecting directional price squeezes.
 • An integrated volatility measure helps avoid false signals and clarifies trend direction.
 • Lastly, it alerts traders when a volume climax is likely reached during a move.

This study primarily focuses on capturing momentum while concurrently alerting traders to shifting market dynamics, thereby aiding in the decision to either extend a position’s duration or optimize exit timing. The set of analytical tools, deployed alongside the trend-following indicator, are integrated to reflect the concepts outlined above. Furthermore, this framework utilizes distinctive methods for trend identification, consolidation recognition, directional squeeze assessment, and volume climax analysis—approaches that are not currently documented in publicly available resources.

█ Explanation of Core Components
 1. Trend Following Consolidated Adaptive Moving Average:
At the core of the study is the Jurik Adaptive Average Curve, a fast-response adaptive moving average refined with an adaptive Relative Strength Index (RSX) function, known as Jurik RSX. This curve displays three trend modes—bullish, bearish, and indecisive—each customizable in color.
Users can adjust parameters such as the Phase and Consolidation Period:
 • Phase: Influences the timing of trend signals, accommodating various trading styles. A lower phase value can produce leading signals, while a higher value may result in lagging signals.
 • Consolidation Period: Helps filter out false signals. Optimize this period based on the time frame and instrument.
 • Momentum Slope Threshold: As mentioned earlier, the Jurik moving average values are consolidated against the Dynamic Jurik RSX. Crossing the slope threshold of the Jurik RSX will trigger consolidation.

The main curve in the middle represents the overall trend. The issue with moving averages is that they work well in trends but when market is in consolidation, many false signals can be generated. The consolidation period acts as a second fast signal curve that helps eliminate the false signals generated through the standard adaptive moving average. This is basically done by measuring the momentum of the move itself through the Jurik RSX. There are other tools in this study that should also help the trader avoid false signals which will be fully described below.

 2. Implied Tops and Bottoms
The study also detects Implied Tops and Bottoms during market cycles using the Composite Momentum and Projections. It offers three detection modes:
 • Strong Signals: Indicate significant potential reversal points.
 • Medium Signals: Typically displayed near the end of a trend, suggesting traders should prepare to exit.
 • Rolling Signals: Alert traders to set tight stop losses to secure profits, as the market may be approaching a turning point.

By default, the colors of Rolling Signals and Medium Signals are the same for simplicity.

Note the following:
 • The fast and slow period have the most effect on implied tops and bottoms detection.
 • Adjusting the main period will also have an overall effect.

The above chart shows rolling tops, rolling bottoms, strong tops, and strong bottoms. A rolling top of bottom indicate an increase in momentum in that direction and thus a tight stoploss would be recommended, while a strong top/bottom indicates that an exit is warranted.

 3. Consolidation and Volatility
If enabled, '+' will appear above the ceiling and floor plots if consolidation is detected. Consolidation is detected by using lookback function that determine if price is below a threshold or not. If below, then consolidation would be confirmed. This is accomplished by adjusting the 'Price Consolidation Threshold' period

The above chart demonstrates detection of consolidation on a 1-minute chart. Also, note the ceiling and floor plot, it expands when volatility is high.
Consolidation detection helps weed out long and short signals indicated by the main curve.

 4. Directional Squeeze
Another unique feature of this indicator is the detection of directional price squeeze. Directional squeeze is defined as a price push in the direction indicated by momentum whether upward or downward. This is different from the common squeeze indicators found on the web since this one is detecting a directional push.

The Directional Squeeze feature, indicated by up and down triangles above the main curve, highlights strong trends in the market's current direction:

 • Trend Continuation: Allows traders to stay in profitable trades longer during strong trending markets.
 • Multiple Modes: Offers single-bar (short-term) and longer-term squeezes. Single-bar squeezes can signal potential market reversals, while longer-term squeezes are useful in sustained trends.

Be mindful that under certain conditions, the directional squeeze could be directionless(sideways) if consolidation is outlined by the indicator. This is another useful feature the trader could utilize. The chart above mostly demonstrates directional squeeze but directionless can also be observed.

 5. Volume Volatility and Volume Climax Detection
An essential feature of the Adaptive Sharp Momentum Study is its ability to measure Volume Volatility and detect Volume Climax moments:

 • Volume Volatility Measure: Integrated into the study to help avoid false signals by assessing the strength of market moves. It provides better clarity on trend direction by indicating when the market is experiencing significant volume changes.
 • Volume Climax Alerts: The study alerts traders when a volume climax is likely reached during a move, which is helpful for identifying potential reversal points or the culmination of a trend. Brighter confirmation signal dots indicate these climaxes, helping traders make timely entry/exit decisions.
 • Adjustable Parameters: Traders can set the Volume Volatility Threshold and adjust the Volume Lookback Period to tailor the sensitivity of volume climax detection according to their trading strategy.


 5. The indicator contains other useful features:
 • Cycles: Helps determine when to enter long or short trades based on upward or downward market cycles. It also aids in recognizing retracement levels during a trend, allowing traders to capitalize on brief counter-trend movements. Those cycles can be observed as the up and down gray lines on the chart.
 • Real-Time Table: The table is another visual aid that summarizes the status of each feature in real-time.

█ How to Use this Study Effectively
The main curve in the middle is your final decision point. Prior to entering a trade look for the following:
 • Is the market in consolidation? If yes, then you'd be advised not to enter the trade until the study clearly shows no consolidation
 • Is the ceil or floor plots showing a strong top or bottom, or even a volume climax in the direction to intend to enter? If yes, then either ensure you enter at a tight stop or don't enter
 • Is there an indication of a directional squeeze with no consolidation or volume climax? Then this would be an ideal place to enter. Be mindful though that entering directional squeeze too late is not recommended.

 • Once you are in the trade, look at consolidation, implied tops and bottoms, and volume climax to determine exit point. You will quickly realize if you entered a trade prematurely.

 • Utilize the directional squeeze and the prevalent trend to help you stay in the trade longer.
 • Adjust your stop losses depending on whether you are seeing a rolling implied top/bottom or a strong top/bottom.
 • Also, at volume climaxes, be ready to exit. The approach with volume climax detection should be the same as the implied tops/bottoms.

Below is a chart demonstrating trading on a 1-minute chart. The study could be used for any time frame:

** Important Note **
This study relies on volume readings. Incorrect evaluation will be concluded without proper volume data.

█ How the Adaptive Sharp Momentum Works?
---Main Curve - Jurik Moving Average and RSX---
The Jurik Moving Average (JMA) and the Jurik RSX with Fisher transform (Relative Strength Index Extended) are technical tools designed to enhance data processing efficiency. The JMA uses an adaptive smoothing algorithm to dynamically adjust to market conditions, reducing lag while maintaining high responsiveness to price changes. the JMA incorporates a mechanism that determines smoothness based on input volatility. The RSX, on the other hand, tracks relative strength without introducing the overshoots and noise commonly seen in other momentum indicators. It achieves this by applying a yet another JMA smoothing function that ensures stability and consistency, making it a better candidate for identifying shifts.

This is a unique approach, but can simply be equated to two moving averages crossing over, except in this case, the RSX is crossing over with the JMA.

The process of determining market trends and consolidation for the main curve revolves around evaluating multiple conditions and rankings of indicators such as Jurik RSX, Fisher Transform, and Volume-based metrics (Adaptive On Balance Volume and Price Volatility). Here's how consolidation and trends are identified:

 1. Trend Override Logic: The core logic evaluates whether specific conditions override the default trend determined by the JMA.
 • Bearish Overrides: A trend is classified as bearish if specific conditions involving negative slopes of the RSX, bearish Fisher Transform readings, and other auxiliary rankings (AOBV trend rank or volatility ranks) are met.
 • Bullish Overrides: Similarly, bullish trends are determined by the presence of positive RSX slopes, bullish Fisher readings, and supporting AOBV and volatility ranks.
 • Neutral Overrides: If neither bullish nor bearish overrides dominate, and conflicting conditions are detected (e.g., a bearish Fisher with a bullish OBV), the trend can be overridden to neutral.

 2. Dynamic Slope and Rank Analysis: RSX and Jurik Slopes: The slopes of the RSX and Jurik indicators play an important role. Increasing slopes suggest bullish momentum, while decreasing slopes imply bearish momentum.

 3. Narrow Spread Analysis: Consolidation zones are identified by examining conditions like narrow spreads in price action and mixed indicator signals (e.g., a positive RSX slope alongside a neutral or bearish AOBV).
 • When consolidation is detected, the system looks for confirming signals (AOBV or Fisher alignment) to determine whether the next move is likely to be bullish or bearish.

 4.Fallback Logic:
If no explicit conditions are met for bullish, bearish, or neutral trends, the system defaults to comparing the current and previous values of the Jurik Moving Average. If the JMA is rising, the trend is set to bullish; otherwise, it defaults to bearish.

The process of consolidating The RSX with JMA, attempts to confirm the trend suggested by the Jurik moving average. As shown above, several factors play into this, but it is mostly motivated by the RSX and its slope

-- Detecting Tops and Bottoms --
 • Composite Momentum
The Composite Momentum indicator analyzes the market's directional strength to identify implied tops and bottoms, especially at extreme values. It evaluates momentum by categorizing it into ranges that reflect moderate or strong trends for both bullish and bearish conditions. When momentum exceeds a positive threshold, it indicates a strong top, whereas values below a negative threshold then it's a strong bottom.

 • Laguerre Dynamic Projection Bands
The Laguerre Dynamic Projection Bands focuses on price positioning within calculated dynamic boundaries. By applying linear regression, it projects upper and lower price bands, which serve as potential resistance and support levels. The oscillator value ranges from 0 to 100, representing the relative position of the current price. A value above 70 indicates the price is near a projected top, while a value below 30 suggests proximity to a projected bottom. Through custom Laguerre smoothing, the setup ensures that its signals remain stable and actionable.

 • How They Work Together
The Composite Momentum and Projection Oscillator complement each other in detecting market tops and bottoms. The Projection Oscillator provides an early indication when price nears a critical level, while the Composite Momentum confirms whether the momentum supports the formation of a significant top or bottom.

-- Consolidation Detection, Volatility, and Volume Climax Detection --
 • Summary of Consolidation Detection:
Consolidation is identified through a combination of statistical and smoothing applied to price data. The approach calculates deviations around the main plot using squared price inputs, smoothed averages, and adaptive multipliers. These deviations form dynamic upper and lower boundaries that adapt to changing market conditions. The system further evaluates these boundaries against historical bars to calculate a volume percentage, which indicates how often recent price action remains within these bands. A low percentage suggests consolidation, characterized by reduced volatility and price movement confined within a tighter range.

The bands around the main plot are derived from the calculated maximum deviations, creating adaptive ceilings and floors that expand or contract based on market dynamics. The Ceiling and Floor plots represent the outermost boundaries, while additional retracement plots are drawn based on the Composite Momentum wave rank. For example, during an uptrend, the retrace levels adjust upward in fractional steps relative to the deviation, signaling possible resistance levels. In downtrends, similar logic applies in reverse to determine support levels. These bands visually represent the volatility envelope and help contextualize price movements relative to expected ranges. Whenever, low volatility is detected, a visual "+" indicator is added to the plot to highlight that the market is likely in consolidation mode.

 • How the Adaptive OBV Applies the Same Logic:
The Adaptive On-Balance Volume (OBV) uses a similar mechanism to detect volume climaxes by analyzing deviations in volume data. Instead of price, the OBV logic applies the squared input and smoothing methods to volume flows. By comparing these deviations to historical norms, the system identifies periods of high or low volatility in volume, which often coincide with potential breakouts or consolidation zones.

 • How They Work Together
The consolidation detection process and the adaptive bands work in tandem to provide traders with a clear visualization of market conditions. When consolidation is detected, the dynamic bands narrow and a "+" sign is visualized, signaling reduced volatility and potential breakout opportunities. Similarly, volume-based analysis through the adaptive OBV helps confirm whether a breakout is accompanied by significant volume, adding confidence to trade decisions. Together, they enable anticipation of market shifts.

-- Directional Squeeze --
A directional price squeeze refers to a market condition where price compresses in a particular direction. This provides traders with an opportunity to stay in trades longer by aligning with the prevailing directional bias. This unique concept generates dynamic limits based on lookback period. Their convergence upward or downward is typically a strong indication of a price push toward the respective direction.

In this approach, the system looks at the highest and lowest values of a smoothed momentum reading over a recent period and measures the distance between them. Instead of relying on a static “overbought” or “oversold” line, it calculates new boundaries as a fraction of that distance, scaling the thresholds to match the price behavior. When these dynamically adjusted limits converge, it suggests a “directional squeeze”—meaning price is moving within a more compressed or focused range. Because these boundaries adapt to the market’s own highs and lows, they provide a more responsive indication of when price may be shifting into or out of a strong directional move.

 • Determining the Directional Squeeze
Directional squeeze is identified using dynamic limits derived from two key factors:
Schaff Trend Cycle (STC) for single-bar squeezes. and the Slow RSI (SRSI) for multi-bar or longer-term squeezes. Both are utilizing a custom alpha factor for adaptability and conformance with the JMA and Dynamic RSX studies.

 • Directional Trend Confirmation:
If the SRSI or STC approaches the limits, additional conditions such as Fisher RSX (momentum signals) and AOBV (volume signals) and the trend already established by the JMA are aligned. If so, then a squeezed in that trend directional is established.

█ Why These Components All Work Together?
The Adaptive Sharp Momentum Study integrates multiple components to provide a framework for analyzing market dynamics. Each feature addresses specific challenges in trading:
 • Core Trend Identification:
The Jurik Adaptive Moving Average (JMA) and Jurik RSX ensure better trend detection by reducing noise and dynamically confirming momentum, thus minimizing lag and false signals.
 • Implied Tops and Bottoms:
The combination of Composite Momentum and Laguerre Dynamic Projection Bands highlights critical turning points. This dual-layered approach identifies potential reversals and key support/resistance levels with improved clarity.
 • Consolidation and Volatility:
Adaptive ceilings, floors, and consolidation detection filter out indecisive market phases. This helps avoid unreliable signals and provides a better perspective on potential breakouts or continuations.
 • Directional Squeeze:
The Directional Squeeze feature identifies directional bias in price compression. Its dynamic thresholds adapt to market conditions, aiding in the assessment of strong directional moves.
 • Volume Climax:
Volume volatility and climax detection highlight key moments of market activity, aiding in the evaluation of trend strength and potential turning points.
 • Integrated Framework:
The integration of these components creates a system where each element complements the others.

This study offers a methodical approach to analyzing trends, momentum, and volatility while filtering noise. It is a tool designed to assist traders in navigating complex market conditions.

█ Disclaimer
This script is provided for educational and informational purposes only and should not be considered financial advice. Trading financial instruments carries a high level of risk and may not be suitable for all investors. Before using this script, please consult with a qualified financial advisor to ensure it aligns with your individual circumstances. The author does not guarantee the accuracy or completeness of the script and is not responsible for any losses or damages that may occur from its use. Use this script at your own risk.