MacroTide Elasticity System

The MacroTide Elasticity System is a professional-grade technical analysis tool designed to identify potential trend exhaustions and reversals by modeling price action as an elastic band stretched from a volume-weighted baseline. Unlike standard oscillators (like RSI) that only look at price changes, MacroTide integrates Volume, Price Range, and Volatility to gauge the "energy" behind a move.

1. Concepts and Methodology

The core concept is Mean Reversion based on Volume-Weighted Elasticity. Markets tend to snap back to a value consensus (mean) after over-extension.

Volume-Weighted Baseline: We use a Volume Weighted Moving Average (VWMA) rather than a simple SMA. This ensures that heavy-volume trading days pull the baseline closer to price, while low-volume drift allows the baseline to lag, accurately representing the "true" average cost.

Elasticity Physics: The oscillator calculates how far price has deviated from this VWMA baseline, measured in standard deviations. This creates a normalized "Elasticity Score" (0-100).

High Score (>80): Price is over-extended to the upside (Overbought) relative to volume support.

Low Score (<20): Price is over-extended to the downside (Oversold).

Institutional Absorption (Churn): The script detects specific bar anomalies where Volume is High but Price Range is Low. This pattern often indicates "Churn"—where institutions are absorbing supply or unloading positions without moving the price significantly.

2. Key Features

MacroTrend Detection: Visualizes the market's stretch limits.

Divergence Scanner: Automatically detects and labels Regular Bullish and Bearish divergences. This occurs when price makes a new extreme, but the Elasticity Oscillator fails to confirm it, signaling waning momentum.

Absorption Events: Highlights yellow "sun" markers on the oscillator when high-volume churn is detected, often preceding a breakout or reversal.

Dynamic Coloring: Candles and oscillator lines change color based on the slope of the elasticity (Green for rising momentum, Red for falling).

3. How to Use

Trend Reversals: Look for the oscillator to enter the Overbought (80) or Oversold (20) zones. A reversal signal (triangle marker) is generated when the oscillator crosses back out of these zones, indicating the "snap back" effect has begun.

Divergence Confirmation: Use the "DIV" labels as early warning signs. A Bullish Divergence in an oversold zone is a high-probability setup for a long entry.

Filtering Trends: The center line (50) acts as a trend filter. Above 50 indicates bullish bias; below 50 indicates bearish bias.

4. Settings & Customisation

Lookback Period: Default is 21 (Swing). Increase to 50 or 100 for Macro/Long-term analysis.

StdDev Multiplier: Adjusts the sensitivity of the bands. Higher values (e.g., 2.5 or 3.0) are better for volatile assets like Crypto.

Absorption Volume Factor: Threshold for detecting churn. Default is 1.5x average volume.

Disclaimer: This tool is for informational purposes only. Past performance (divergences/signals) does not guarantee future results. Always manage risk effectively.