1) Economic Data / Fed Policy
Macro backdrop sets liquidity tone across all assets
- Rate hikes drain liquidity, amplifying CPSI Sell bias in market cycles
- Easing/dovish policy injects liquidity, confirming CPSI Buy setups
- Major data releases (CPI, Jobs, GDP) create volatility windows aligned with cycle shifts
- Use policy as context filter, not signal — CPSI triggers, policy fuels
- Federal Reserve Outlook Deep Dive for a deeper study and outlook on Federal Reserve policy
2) Cycle Price vs Cycle Strength
Strength guides the cycle signal; price can diverge from it
Candle Strength represents the combined positive and negative values of the cycle, along with its current phase, to indicate the overall position strength within the cycle.
Buy and Sell Alerts function as filtered signals designed to identify opportunities to buy at lower levels of strength and sell at higher levels of strength. Alerts are not Price based.
Price does not always move in alignment with cycle strength; this misalignment is referred to as divergence.
For improved price guidance, Bull and Bear filters should be used in conjunction with the Closing Price relative to the Average Price, providing a more structured and reliable view of price positioning.
3) Candle Type • Phase • Strength
Micro analysis of current cycle position
4) DRR — Directional Range Radar
Measures conviction strength
- Low DRR indicates unconvincing move with reversal risk
- High DRR shows silent accumulation/distribution building
- Critical to confirm price action backed by measurable conviction
4b) Pool Size Liquidity Balance
Balance validates alerts; raw price movement insufficient alone
Buy Bias: Pool > Liquidity + Strength 0 at Market Levels 1–2
Sell Bias: Pool < Liquidity + Strength fading at Market Levels 3–4
5) Price vs. Average Price
Uses a moving baseline to judge where price is positioned
Average Price is the baseline. Comparing the current price to that average shows whether price is stretched above, below, or near fair cycle value.
Positive: price is above the average. Negative: price is below the average.
6) Close Types — CAPH • CAPC • CBPC • CBPL
Actual closes confirm or deny candle pattern implications