Running-percentile close divergences and trend filters

Clustered close mismatches as a hypothesis

The archive workflow separates extrinsic from intrinsic divergence. It treats clustered exceptions to the usual close-near-extreme habit of large sessions as a running sum, and that sum underpins the bull and bear readings.

Under ordinary conditions a weak close near the session low accompanies a relatively large decline, and a strong close near the session high accompanies a relatively large advance. Repeated breaks of those pairings are read as a potential top or bottom. That run of failed pairings is the close-location-cluster.

Strong directional sessions are scored against their own history with a running-percentile rather than an average. The archive presents that rank as what makes the bull and bear readings adaptive compared with other divergence tools.

Assign a continuation or fade role

The same bull and bear readings are used both to mark extremes and to mark temporary reversals. A stronger existing trend is described as making an opposing signal more informative as a reversal hypothesis. Divergence is not reserved for fading the tape: the same readings are also used to seek entries along an existing trend, including a trend visible only on a higher time frame.

During a strong trend, opposing prints can be stretched and lose much of their accuracy even when they still precede a turn. A separate trend-filter then labels each divergence as countertrend or not, and a later reaffirmation of a first extreme is treated as the more useful print.

Editorial reading: a relative-strength-index lookback on ordered price can sit beside that filter as a forecast-style baseline, so the explicit quantitative reading can be compared with a later out-of-sample outcome. That oscillator is an editorial companion, not a replacement for the trend-filter label.

A trailing stop, not an immediate fill

The signals are characterized as arriving early far more often than late or on time, which is why a trailing-entry-stop is preferred to an immediate market order. When the same readings are used to seek a with-trend entry after a late-stage horizontal print, a delayed technical stop means the print is filled only if a breakout actually occurs.

Search zones and uneven quality

Horizontal ranges after a prior directional leg are treated as useful search zones. The preceding up or down phase, together with whether volatility in the range is elevated, is used to distinguish accumulation from distribution.

The readings are said to become more accurate while volatility is still increasing rather than merely elevated, and historical tests are described as favoring higher time frames when that rising-volatility condition holds. An earlier accurate print on the same name is treated as a possible precursor of later reliability, so signal quality is allowed to vary by equity rather than assumed to be uniform.