Cycle-Phase Liquidity Reversal Engine [PhenLabs] — Indicator by PhenLabs — TradingView

Version: PineScript™ v6

📌 Description
The Cycle-Phase Liquidity Reversal Engine identifies liquidity sweeps that occur when price is stretched within its local cycle and beginning to rotate. Instead of treating every wick through a swing as a reversal, it qualifies the event with cyclical phase and an optional volume-absorption proxy.

A qualified sweep arms a setup rather than printing an immediate signal. Price must then confirm through the sweep candle within a user-defined window, helping separate genuine reclaims from unresolved stop runs. Confirmed setups receive risk-proportional entry, invalidation, and target projections.

🚀 Points of Innovation

• Combines confirmed swing-liquidity sweeps with normalized cyclical displacement.
• Uses cycle rotation to distinguish a stretched turning point from a sweep in active continuation.
• Adds a price-and-volume absorption proxy without requiring order-flow data.
• Separates setup qualification from structural confirmation.
• Projects two configurable R-multiple targets from the actual swept level.
• Summarizes phase, relative volume, setup state, and signal bias in a live dashboard.

🔧 Core Components

• Liquidity structure engine: confirms pivot highs and lows, then monitors those levels for wick-through-and-reclaim behavior.
• Cycle phase model: detrends price with an EMA and normalizes displacement as a rolling z-score.
• Absorption gate: identifies elevated relative volume paired with a compressed candle body.
• Confirmation engine: requires a close through the qualified sweep candle before releasing a signal.
• Projection model: anchors invalidation beyond the swept level and derives targets from the resulting risk distance.

🔥 Key Features

• Non-lookahead pivot structure with confirmed-bar sweep detection.
• Balanced and Strict qualification modes for flexible signal density.
• Optional EMA context filter for directional alignment.
• Active buy-side and sell-side liquidity plots.
• Qualified-sweep markers plus distinct confirmed-reversal signals.
• Bullish and bearish alert conditions for automation-ready monitoring.

🎨 Visualization

• Muted horizontal liquidity lines show the latest confirmed swing high and swing low.
• Small circles identify qualified sweeps; triangles identify fully confirmed reversals.
• Dotted entry and invalidation projections separate execution levels from structure.
• Dashed Target 1 and Target 2 lines show configurable reward multiples.
• The top-right dashboard displays cycle z-score, phase, relative volume, absorption state, armed setup, and last signal bias.

📖 Usage Guidelines

• Pivot Strength — Default: 5 — Range: 2-25 — Increase for higher-timeframe structure and fewer liquidity levels; reduce for more reactive intraday swings.
• Confirmation Window — Default: 4 — Range: 1-20 — Sets how long price has to confirm through the sweep candle.
• Cycle Length — Default: 34 — Range: 10-100 — Controls the detrending and normalization horizon.
• Phase Stretch Threshold — Default: 0.85 — Range: 0.25-3.00 — Higher values demand more extreme cyclical displacement.
• Qualification Mode — Default: Balanced — Options: Balanced or Strict — Balanced accepts phase rotation or absorption; Strict requires both.
• Relative Volume Length — Default: 20 — Range: 5-100 — Sets the baseline used for the volume comparison.
• Minimum Relative Volume — Default: 1.20 — Range: 0.50-5.00 — Raises or lowers the activity required by the absorption proxy.
• Maximum Body / Range — Default: 0.45 — Range: 0.10-0.90 — Lower values require stronger rejection and compression.
• EMA Context Filter — Default: Off — When enabled, bullish confirmations must close above the EMA and bearish confirmations below it.
• Stop Buffer — Default: 0.20 ATR — Range: 0.00-2.00 — Adds volatility-adjusted space beyond the swept level.
• Target 1 — Default: 1.00R — Range: 0.50-5.00R — Sets the first projected objective.
• Target 2 — Default: 2.00R — Range: 1.00-10.00R — Sets the extended projected objective.

✅ Best Use Cases

• Intraday liquidity reclaims around established swing highs and lows.
• Index, futures, FX, and liquid crypto markets with reliable volume behavior.
• Reversal confirmation after stop runs at session or local structural extremes.
• Confluence with session levels, higher-timeframe bias, or independent market structure.

⚠️ Limitations

• Confirmed pivots appear only after the right-side pivot bars have elapsed.
• The volume gate uses chart volume and is not a substitute for exchange-level order flow.
• Cycle behavior is unstable during one-directional expansion and news-driven repricing.
• Projected levels are analytical references, not guaranteed fills or outcomes.

💡 What Makes This Unique

• Temporal liquidity qualification: the engine evaluates where a sweep occurs within a normalized local price cycle.
• Two-stage signal design: a sweep must first qualify and then earn confirmation through subsequent price structure.
• Risk geometry: targets adapt to the distance between confirmation and the swept liquidity level rather than using arbitrary fixed offsets.

🔬 How It Works

1. Confirmed pivots establish the current buy-side and sell-side liquidity references.
2. A wick through a reference followed by a close back across it registers a sweep.
3. The sweep is qualified by cycle stretch and rotation, volume absorption, or both, depending on the selected mode.
4. The setup remains armed for the chosen confirmation window.
5. A close through the sweep candle confirms the reversal and releases the signal.
6. The script places invalidation beyond the swept level and projects two R-multiple targets.

💡 Note:
Use the dashboard to distinguish a developing qualification from a confirmed setup. Start with Balanced mode, then move to Strict mode when the symbol provides dependable volume and you want fewer signals. Combine the engine with independent context and test settings on each market and timeframe. This tool is an analytical aid and is not financial advice.