Rounded bottom landmarks, invalidation, and breakout rules

Editorial reading

Editorial interpretation: treat a rounded bottom as three separately testable layers. The first layer is named rim-and-low construction. The second is an explicit cancel rule. The third is an entry that may stay silent until geometry and volume both pass. That reading is editorial and is not an archive claim.

The later high that finishes the bowl is the rightRim, and it later serves as the breakout reference. The cupLow is the lowest close located between the two rims of the rounded bowl. The landmarkSet is the named price-and-location pairs a recognizer must find before any pattern flag can turn on.

The held rightRim reference

After the left rim, the rightRim, and the cupLow are located, a horizontal reference is held at the rightRim price until either an upside close through that level or a close that drops below a stated fraction of it.

The same procedure can raise one alert when the formation is first accepted and a second alert when price later closes above the rightRim.

The stored formation can be cancelled if the close falls below 80 percent of the rightRim reference. That close is the invalidationClose.

Joint gates for an accepted break

Editorial note: the third layer is an entry that can remain silent until both geometry and volume pass.

An accepted upside break can require both a close above the rightRim and a volume reading above a moving average of volume. That joint condition is a volumeConfirmedBreak.

A screen can locate five landmarks by both price and bar position, then apply joint constraints on those ten quantities before a binary cup flag is allowed to equal one. Companion ratio statistics computed in the same screen are specified as uninterpretable unless that binary cup flag equals one.

One geometric screen requires the later handle low to sit above a weighted blend of the cupLow and the rightRim high, and it also requires minimum bar gaps among the landmark locations.

A complete five-bar close sequence

A five-bar close sequence that places the lowest close two bars back, with neighboring closes stepping down then up, can be treated as a complete buy rule. The inverted sequence is the matching sell rule. Every comparison in the sequence must be true at once. That four-comparison close sequence inside a five-bar window is the fiveBarReversal.