Step 1: Market State Classification – AI Decision Tree Analysis
#### Primary Branch (ADX(14)):
- ADX(14) = 26.45622044
Since ( 21.06882859 leq text{ADX(14)} < 29.06882859 ), we analyze the market as a Weak Trend Market.
#### Weak Trend Market Analysis (21.06882859 ≤ ADX < 29.06882859)
- Option B: Trend Initiation State (Bullish/Bearish)
Check Conditions:
- Clear breakout above (bullish) or below (bearish) a key resistance or support level:
– Below 20-period Low: True
– Magnitude: 0.72%
- Volume expansion confirms the breakout:
– Volume Spike (>1.5x average): False
– Ratio: 1.07
- ADX begins to rise from low levels:
– ADX(14) = 26.45622044 (This is not rising from a very low level, but it is in the weak trend range)
- Price maintains direction in the breakout’s favor for multiple bars:
– The price has been moving down and has broken below the 20-period low, indicating a bearish trend initiation.
Classification:
- 3 out of 4 conditions are met, which strongly indicates a Trend Initiation (Bearish) state.
Final Output:
- Market State: Trend Initiation (Bearish) | Confidence: 75%
Step 2: Specified Model Quantitative Analysis
#### Models for Option B: Trend Initiation State (Bullish/Bearish)
- Volatility Squeeze Breakout
– Prerequisite: BB Width < Dynamic Bandwidth Threshold
– BB Bandwidth = 0.01364582 (Dynamic Bandwidth = 0.02101039)
– Condition Met: True
– Trend Initiation Bearish (Sell): Close 1.0 AND Breakout Confirmation
– Close = 4758.62000000
– KC Lower = 4668.16679570
– Breakout Filter = 56.96357143
– KC Lower – Breakout Filter = 4668.16679570 – 56.96357143 = 4611.20322427
– VO = 2.31314658 (Condition Met: True)
– Breakout Confirmation: Price is below the KC Lower Band minus the Breakout Filter.
– Condition Met: True
– Signal: Sell Signal
- Volume – Price Breakout of Previous High / Low
– Trend Initiation Bearish (Sell): Close 0.1%
– Close = 4758.62000000
– Previous 20-period Low = 4665.83000000
– Increased Volume: False
– Breakout Magnitude = 0.72% (Condition Met: True)
– Condition Met: False (Volume condition not met)
- DMI Momentum Crossover Start
– Prerequisite: 21.06882859 ≤ ADX(14) < 29.06882859
– Condition Met: True
– Trend Initiation Bearish (Sell): -DI(14) crosses above + DI(14)(Death Cross)
– +DI(14) = 28.09682533
– -DI(14) = 10.03882910
– Condition Met: False (No Death Cross)
Actionable Signals:
- Sell Signal (Volatility Squeeze Breakout)
Step 3: AI Autonomous Analysis
#### Methodology:
- Pattern Recognition: Identify candlestick patterns and their implications.
- Multi-timeframe Analysis: Use 5-minute data and consider recent patterns.
- Confluence of Divergences: Look for divergences in RSI, MACD, and other indicators.
Analysis:
- Candlestick Patterns:
– Bearish Engulfing Pattern: Not present.
– Bearish Pin Bar: Not present.
– Bearish Harami Pattern: Not present.
- Indicators:
– RSI(14) = 71.87176574 (Overbought, but no divergence)
– MACD Histogram = 12.34280414 (Positive, but no divergence)
– Stochastic %K = 98.87310754, %D = 97.17847559 (Overbought, but no divergence)
- Volume:
– Volume Oscillator (VO) = 2.31314658 (Slightly above average, but no significant spike)
- Support/Resistance:
– Pivot Points:
– R1 = 4707.37666667
– PP = 4662.88333333
– S1 = 4612.90666667
– Current Close = 4758.62000000 (Above R1, indicating potential bearish reversal)
High-Confidence Trading Signals:
- Sell Signal (Based on Volatility Squeeze Breakdown and Pivot Point Resistance)
Comparison:
- Specified Model (Step 2): Sell Signal (Volatility Squeeze Breakout)
- Autonomous AI Analysis (Step 3): Sell Signal (Volatility Squeeze Breakdown and Pivot Point Resistance)
Step 4: Generate 1 trading signal based on the confirmed trading plan
#### Weighted Decision Matrix:
- Specified Model (Step 2): Sell Signal (+1)
- Autonomous AI Analysis (Step 3): Sell Signal (+1)
Scoring:
- Step2_Score = +1
- Step3_Score = +1
- Final Score = (Step2_Score × 0.6) + (Step3_Score × 0.4) = (1 × 0.6) + (1 × 0.4) = 1.0
Threshold-Based Action:
- Plan Short: Final Score ≥ 0.4
Stop-Loss Strategy:
- ADX = 26.45622044 (Normal Ranging)
- ATR = 18.98785714
- Time Factor (UTC+8 Beijing Time): 07:20 (Asian Main Session) = 1.1
- Volatility Factor (Normal Volatility) = 1.0
- Base Multiplier = max(3.0 × ATR, 1.4 × distance to key level)
- Distance to Key Level (S1 = 4612.90666667) = 4758.62000000 – 4612.90666667 = 145.71333333
- Base Multiplier = max(3.0 × 18.98785714, 1.4 × 145.71333333) = max(56.96357142, 203.99866666) = 203.99866666
- Final Stop-Loss = 4758.62000000 – 203.99866666 = 4554.62133334
- Adjusted Stop-Loss (min $10 lower): 4554.62133334 – 10 = 4544.62133334
Take-Profit Strategy:
- Risk-Reward Ratio (Normal Ranging) = 1.3:1
- Swing Point (S1 = 4612.90666667)
- Buffer = 0.5 × ATR = 0.5 × 18.98785714 = 9.49392857
- Take-Profit = 4612.90666667 – 9.49392857 = 4593.41273810
- Adjusted Take-Profit (min $10 higher): 4593.41273810 + 10 = 4603.41273810
Final Signal:
- Direction signal: Short
- Trade entry price: >>> 4758.62 <<<
- Signal Strength: =>> -10 <<=
- Stop-Loss price: ->> 4544.62 <<-
- Take-Profit price: +>> 4603.41 <<+
Step 5: Summarize analysis conclusions
- Market State: Trend Initiation (Bearish) with 75% confidence.
- Trading Plan: Plan Short
- Entry Price: 4758.62
- Stop-Loss Price: 4544.62
- Take-Profit Price: 4603.41
- Signal Strength: -10 (Strong Sell Signal)
- Key Levels:
– Support Level: 4612.91 (S1)
– Resistance Level: 4707.38 (R1)
The market is showing signs of a bearish trend initiation, supported by both the specified model and autonomous AI analysis. The trade plan is to go short with a strong sell signal, and the stop-loss and take-profit levels are set according to the risk-reward ratio and volatility adjustments.