As mentioned previously, Range Deviation Pivots provide the core to other studies and patterns and is covered extensively in my first book New Methods in Technical Analysis. One of these is what is called Powwerplay and Slammdunk, the former being a positive indicator and the latter negative.
Originally created for analysis on Individual stocks where the patterns relative rarity prevented too many focus points, it also has applications on Futures and Spreads on occasion.
Beginning with Powwerplay, it is triggered when the expansion of Range for the day goes beyond the 6th Deviation of the Range Deviation Pivot but does not necessarily close beyond it. Remember, that the Range Deviation Pivots are not symmetrical. This means that the barriers differ depending whether expansion occurs with the trend (higher barrier) or against the trend (lower barrier).
As Range Deviation pivots are created based on the opening price, the values are fixed for the day with signals often being event driven.
PowwerPlay can be used to identify major reversals to a downtrend or signal a breakout and acceleration in a new uptrend and is identified as a Green Square. Whilst the pattern has power anywhere, when looking for a reversal to a downtrend, connecting it with major supports is where it has the most potency.
The Nasdaq shows a classic set-up where price respects the monthly based support (blue line), before a signal is triggered.
Gold had a similar acceleration, but this time it occurred after price respected weekly based support (black line), before the PowwerPlay signalled a breakout through the monthly barrier.
Bitcoin took longer to develop, with a base being formed before a breakout higher.
SlammDunk has the same properties in reverse. Cotton entered a major monthly based resistance zone before SlammDunk triggered the downward move.
The signals are not limited to outright futures and stocks, but also Exchange Traded Spreads. The Gas Oil Brent spread signalled a breakout during the summer.
Heating Oil/WTI produced a signal on the same day but took longer to confirm a breakout.
Powwerplay has different characteristics when an uptrend is already long and mature. When this happens PowwerPlay is a sign that the trend is exhausted.
A similar signal appeared recently on Brent.
However, the trend in the Spreads was the launchpad much earlier.
Dec/Dec Crude
Rbob/WTI
Heating Oil/WTI
Gas Oil/Brent Breakout
