Sunday Gap Cycle-Momentum Hybrid

Family: hybrid · Regime: trending · Complexity: high · Asset classes: FX, Indices · Timeframes: H1, H4

Thesis

Weekend gaps represent fundamental sentiment shifts that set the weekly tone. By combining this regime filter with Ichimoku's equilibrium zones and DeMark's REI velocity, we can identify high-conviction momentum bursts. Using Ehlers DSP as an exit mechanism allows the strategy to capture the bulk of a price cycle while exiting before the inevitable trend correction, which standard trend-following indicators (like moving average crosses) often miss.

Components

• Sunday Opening Gap (regime) — Establishes the weekly bias; gaps signify institutional positioning over the weekend that dictates the directional regime for the first half of the week.
• Ichimoku Kinko Hyo (direction) — Acts as a primary trend filter; price must be on the correct side of the Kumo (Cloud) to ensure the trade aligns with multi-period equilibrium.
• Range Expansion Index (REI) (entry) — Uses DeMark's logic to enter on momentum 'velocity' rather than just price level, filtering out stagnant price action.
• Ehlers Detrended Synthetic Price (DSP) (exit) — Identifies cycle exhaustion; exits trades when the price cycle reaches a peak/trough, regardless of the underlying trend.
• Roshaneforde Pivot Levels (risk) — Provides structural support/resistance based on recent engulfing patterns for hard stop placement and risk-based sizing.
• DEMA 200 & ADX Combined HUD (confirmation) — Confirms high-strength trend presence via ADX and long-term bias via the DEMA 200.

Known failure conditions

• The Sunday Gap is closed and price trends aggressively in the opposite direction for >48 hours.
• ADX remains below 20 for more than 3 consecutive sessions (prolonged range).
• The DSP cycle period (40) fails to capture the dominant market rhythm, leading to premature exits.

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