Momentum Shift RS Engine¶

TradingView Script¶

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Overview¶

This strategy combines multiple momentum and relative strength signals with optional volatility filtering. It's designed to enter long positions when multiple timeframe alignments confirm momentum shifts.

Key Features¶

• Multi-Timeframe RS Analysis: Uses 4 different lookback periods (200, 50, 20, 9) for superlong, long, medium, and short-term relative strength
• Benchmark Comparison: Measures current asset strength vs. benchmark (default: SPY)
• VIX Filter: Optional volatility regime filter (enter only when VIX < 20 SMA & < 18)
• PVT Filter: Price Volume Trend confirmation
• BBW Filter: Bollinger Band Width expansion detection
• RSM Momentum: RSI of normalized relative strength value
• Dynamic Exits: Configurable exit rules (All Active, Price Stops Only, Indicator Only, 9 SMA Trail)
• Cooldown Period: Prevents re-entry immediately after exit

Entry Conditions¶

All of the following must be true:

1. ✅ Trend Filter: Price structure confirms uptrend (configurable: SMA 50 > SMA 200, Price > SMA 200, etc.)
2. ✅ Superlong RS: 200-period normalized RS > 0.2
3. ✅ Long-term RS: 50-period normalized RS > 0.2
4. ✅ Medium-term RS: 20-period normalized RS > 0.0
5. ✅ Short-term Breakout: 9-period normalized RS > 0.8 (choppy breakout)
6. ✅ PVT: Price Volume Trend > Signal line (if enabled)
7. ✅ BBW: Bollinger Band Width > 0.01 threshold (if enabled)
8. ✅ RSM: RSI of normalized RS > 50 (if enabled)
9. ✅ VIX: VIX < 20 SMA AND < 18 (if enabled)
10. ✅ Cooldown: Not within X bars of previous exit (if enabled)

Exit Conditions¶

Depends on selected exit rule type:

"All Active" (Default): - Medium-term normalized RS crosses below 0.2 (indicator exit) - OR price hits consolidated stop (max of: fixed stop loss, 9 SMA trailing stop, breakeven stop)

"Price Stops Only": - Fixed stop loss (default: 2%) - 9 SMA trailing stop - Breakeven stop (triggered after 2% profit)

"Indicator Only": - Medium-term normalized RS crosses below 0.2

"9 SMA Trail Only": - Price closes below 9-period SMA

Visual Indicators¶

• 🟢 Green X-Cross Above Bar: Extreme RS strength (both medium & short > 0.95)

  • Asset is showing extreme relative strength vs. benchmark (SPY)
  • Does NOT necessarily signal a top - strong trends can maintain extreme RS for extended periods
  • Consider: Stay in the trade but tighten trailing stops, or scale out partial profits
  • Watch for: Price action breaking below key SMAs (9/20) or medium RS dropping below 0.8 as actual exit signals

• 🔴 Red X-Cross Below Bar: Extreme RS weakness (both medium & short < 0.1)

  • Asset is at trough relative weakness vs. benchmark (SPY)
  • Could signal potential reversal when combined with other analysis (support levels, volume divergence, oversold oscillators)
  • Avoid new entries until relative strength improves
  • Watch for bullish reversal patterns at these extremes

• Red Background Shading: VIX regime warning (VIX > 20 SMA AND > 18)

  • High volatility environment - exercise caution
  • Consider reducing position sizes or staying out

• Blue Line: 9 SMA (short-term trend & trailing stop reference)

• White Line: 20 SMA (medium-term trend reference)
• Orange Line: 50 SMA (intermediate trend reference)
• Red Line: 200 SMA (long-term trend reference)

Interpreting Extreme RS Signals¶

Green X-Cross (Extreme Strength > 0.95)¶

What it means: - Asset is performing exceptionally strong vs. SPY over both 20-day and 9-day periods - Strong trends can show multiple green X-crosses as they continue higher - This is NOT a reversal signal - it's a confirmation of strength

Trading actions: - ✅ Stay in the trend - don't exit just because of extreme strength - ✅ Tighten trailing stops (use 9 SMA or 20 SMA) to protect profits while staying in the move - ✅ Optional: Scale out 25-50% if you want to lock in some profits while keeping exposure - ✅ Watch for actual exit signals: Medium RS < 0.2, price breaking below 20 SMA, or bearish divergence - ⚠️ New entries: Can still enter on pullbacks to 20 SMA if RS remains > 0.5 and trend structure intact

Red X-Cross (Extreme Weakness < 0.1)¶

What it means: - Asset is performing exceptionally weak vs. SPY over both 20-day and 9-day periods - Relative strength is at multi-week lows

Potential reversal signals (combine with): - ✅ Price at major support level (previous lows, round numbers, Fibonacci) - ✅ Bullish RSI divergence (price making lower lows, RSI making higher lows) - ✅ High volume capitulation (selling exhaustion) - ✅ Hammer/bullish engulfing candlestick patterns - ✅ Sector rotation signals (money flowing back into the sector)

Trading actions: - 🚫 Do not enter long based on X-cross alone - 👀 Add to watchlist for potential reversal setup - 📊 Wait for confirmation: medium RS crosses back above 0.2 with increasing volume - 💡 Risk/reward improves at extreme weakness, but timing is critical

Configuration Tips¶

Conservative Setup¶

• Enable all filters (PVT, BBW, RSM, VIX)
• Use "All Active" exit rules
• Enable cooldown period (3+ bars)

Aggressive Setup¶

• Disable optional filters
• Use "9 SMA Trail Only" exit
• Reduce or disable cooldown

Trend Following Mode¶

• Set trend filter to "SMA 50 > SMA 200"
• Increase entry threshold to 0.3+
• Use "Price Stops Only" exit

Backtest Notes¶

Trading Journal¶