Fuzzy Pivots

So named not because this indicator may seem to be based on fuzzy logic, but rather on the visual effect it produces.  But there is nothing fuzzy about it’s accuracy.

This indicator is a user-tunable tool to display Dual-Purpose Trend Lines (DPTLs); more accurately, overlapping zones of key intersecting high and low pivots.  These zones illustrate historical support and resistance areas repeatedly formed by  Left-Shoulder Pivots (LSPs) and Break-Out Pivots (BOPs).

Aside from the amount of data on your chart, there are 3 major parameters which the user can adjust to “tune” the visual effect, including Pivot Strength, Pivot Intersect Margin, and DPTL Volume Regulator.  Pivot Strength is defined as the number of bars to either side of the pivot bar, Intersect Margin is the number of ticks above and below a pivot to be considered a valid overlap with another pivot, and Volume Regulator is a parameter used to vary the number of overlapping zones.   A fuzzy effect can be produced with higher values of Intersect Margin and Volume Regulator.  A fuzzy zone indicates an area of price consolidation with the brightness of the zone highlighting the greater frequency of intersecting pivots.  A darker zone suggests SR levels of higher degree with less frequent overlaps and typically based on stronger pivots; this should be interpreted as relative strength.

The image below illustrates the concept:

(Click images to enlarge)

Below is an image of the Fuzzy Pivots applied to a daily equities chart for ABT:

The image below is the same chart with the Dynamic Fibonacci Extensions added to show 100% and 138.6% fib resistance areas.  Notice the confluence of the fuzzy pivots above the market with some of the fib extensions, confirming stronger resistance levels:

Below is an image of the Fuzzy Pivots applied to a daily SP Index chart: