Divergence Confirmation Oscillator [Pineify]

Divergence Confirmation Oscillator [Pineify]

Overview
This RSI divergence indicator starts from one timing fact: a pivot is knowable only after its right-side bars close. It scores regular and hidden events, showing both the formation location and the later confirmation time.

Problem Definition
A divergence line drawn back to a pivot can look actionable there, although several bars were still required to confirm it. Binary markers also give equal weight to shallow disagreements and well-separated price/RSI moves. The failures are timing ambiguity and absent evidence quality. This script exposes the delay and ranks completed events; it does not assume divergence predicts reversal.

Design Rationale
Price pivots are the anchors, with RSI sampled on those exact bars. A solid diagonal shows formation; a dotted track from the second pivot to the confirmation bar shows knowledge time. Quality combines spacing, ATR-normalized price movement, RSI movement, threshold context, and RSI departure by confirmation. ATR avoids raw-point scale dependence. Unconfirmed turns would appear earlier, but would break the timing invariant. The chosen tradeoff is delay and selectivity for auditable events.

Key Features

• Confirmed regular/hidden bullish and bearish divergence.
• Adjustable 0–100 quality gate.
• Pivot bridge plus confirmation wait track.
• Bounded follow-through, invalidation, or expiry state.
• Four close-confirmed alerts and optional dashboard.

How It Works

1. RSI uses closes. Price highs/lows become pivots only after the configured bars on both sides; processing occurs when the right-side bar closes.
2. Regular bullish means lower price low and higher RSI; hidden bullish means higher price low and lower RSI. Bearish definitions are symmetric at highs.
3. Only consecutive confirmed pivots inside the separation range interact. Each new pivot becomes the next reference even if no event passes.
4. The score weights spacing 25%, ATR-normalized price displacement 25%, RSI displacement 25%, threshold context 15%, and departure from the second pivot 10%. Price ATR and RSI delta inputs define full component scores.
5. Passing events receive a solid bridge, a dotted pivot-to-confirmation track, and a REG/HID label with Q at confirmation. Nearby labels rotate through three vertical lanes.
6. After confirmation, the watch records favorable ATR movement or RSI midpoint reclaim as follow-through, a buffered close beyond the pivot as invalidation, or the time limit as expiry. Circles and crosses mark these later outcomes without duplicate edge text; they are not alert signals.

Warm-up requires valid RSI, ATR, and pivot history; invalid spacing suppresses events.

How Multiple Indicators Work Together
Price pivots supply auditable anchors; RSI measures momentum there; ATR normalizes price distance; the score ranks the completed disagreement; and the lifecycle observes only later evidence. Removing any part changes the result: without pivots timing is undefined, without RSI divergence disappears, without ATR price scale leaks into quality, and without the wait track confirmation delay is hidden. This is one causal chain, not an unrelated mashup.

Trading Ideas and Insights
Regular events show price extending while RSI disagrees; hidden events show price holding structure while RSI pulls back. Compare the confirmation bar, Q, and lifecycle before forming a thesis. Repeated invalidation suggests retuning the pivot scale. The indicator supplies no entry, stop, size, or expected return.

Unique Aspects
Confirmation geometry is the structural contribution. The diagonal shows where the relationship formed; the dotted track and label show when it became knowable. Five score components rank evidence without altering RSI, and the bounded lifecycle keeps later behavior separate. A historical bridge is therefore created at confirmation, not proof of availability at the pivot.

How to Use
Start with defaults. Cyan/green lower labels show bullish confirmations; orange/red upper labels show bearish ones. Nearby labels rotate through three lanes. Follow the dotted track to confirmation and read Q. Triangles mark events; circles/crosses mark later outcomes named in the dashboard. Use the four close-confirmed alerts.

Customization
Short pivot sides reduce delay but admit noise; long sides select broader swings and confirm later. Separation limits choose pivots. Price ATR, RSI delta, quality, and context calibrate scoring. Follow distance, buffer, and window control lifecycle. Label spacing sets the clustering window. Visual layers and retained events are switchable.

Assumptions and Limitations
Confirmed does not mean correct or profitable. Pivots lag, and historical bridges are drawn only at confirmation. Events and lifecycle changes require a closed bar. ATR is scale, not probability. Consecutive-pivot logic can miss a relationship that skips an intermediate pivot. Trends may invalidate regular divergence; ranges may create many pivots; gaps, thin trading, parameters, and synthetic chart prices can distort results. The script uses chart OHLC only, requests no external or lower-timeframe data, infers no order flow, and performs no execution backtest.

Conclusion
The oscillator makes RSI divergence auditable through confirmed anchors, scale-aware quality, explicit knowledge time, and bounded follow-up. It exposes delay and evidence while preserving uncertainty.