A range-expansion oscillator that can refuse its own stretch

Construction as an allow-or-refuse score

This archive note reconstructs how a numeric score is built from highs, lows and overlap tests, then turned into an allow-or-refuse signal. The construction assembles a skip-a-day ratio, a zero-on-trend rule, zone lines, a duration count and a next-open gate so the procedure can be rebuilt as one sequence.

Editorial interpretation: a stretch reading is unfinished arithmetic. Skip a day, zero a non-overlapping bar, and let a short stay plus the next open veto the signal so the same ratio cannot fire on every extreme.

Skip a day when the increment is formed

Each session's increment compares that session's high and low with the high and low two sessions earlier, not with consecutive closes. That signed two-session high and low expansion is the pressure measure used by the momentum strategy over the system holding period.

The numerator sums those two signed differences. The denominator sums their absolute sizes. The ratio is multiplied by 100 and can move between 100 and -100.

Zero the increment when overlap fails

A session's signed increment is set to zero when neither overlap test holds. One test compares the current high and low with the range five or six sessions back. The other compares the high and low two sessions back with the close seven or eight sessions back.

The overlap filter is the requirement that the current bar or the bar two sessions back still intersects an older range before a nonzero increment is recorded. Editorial note: zeroing a non-overlapping bar is how a running move is kept from feeding the ratio as if it were a fresh expansion.

The five-session range-expansion index

The five-session form plots 100 times the sum of the last five signed increments divided by the sum of the last five absolute increments. That plot is the range-expansion index, scaled from 100 to -100.

Position lines and the duration count

Horizontal position lines at 43 and -43 are the stated overbought and oversold thresholds used to classify the reading. Those overbought and oversold position lines turn a stretched expansion reading into a chart condition that can later be confirmed or refused.

A stay of six or more sessions beyond either line is treated as extreme. The duration count then cancels the current stretch until the reading returns to the middle and a new stay shorter than six sessions appears. Only after that recycle is a setup considered.

The price-oscillator qualifier

After a short oversold stay, the first higher close sets a reference high. The next session must open at or below that high and then print a higher high before an upside candidate is recognized.

After a short overbought stay, the first lower close sets a reference low. The next session must open at or above that low and then print a lower low before a downside candidate is recognized.

An open that gaps through the reference extreme fails the qualifier and is marked as a refused setup rather than a candidate. That next-session open-inside and exceed-the-reference-extreme test is the price-oscillator qualifier.

Rebuilding the full sequence

To rebuild the construction, form the skip-a-day increment, apply the overlap filter before a bar can contribute, plot the five-session range-expansion index, classify it with the 43 and -43 lines, apply the duration count, and only then run the price-oscillator qualifier. The rule-based entry is that fixed sequence of zone, duration, close and next-open checks. All of those checks must pass before a candidate is allowed. Any break in the chain refuses it.