Squat

Squat uses MFI (see full description on our Fade indicator).

Squat is higher volume and lower MFI than the previous bar. The increased volume isn't moving the market, which means the smart money is taking the opposite position. A squat is almost always one of the 3 reversal bars. The squat occurs on the bar before the peak 45% of the time. The squat occurs on the peak bar 20% of the time. The squat occurs on the bar after the peak 35% of the time.

If the squat is a Shooting Star, there's a really good chance that it is the peak. If the squat has a significant volume spike over the previous bar, that too is a good indication of a reversal. Two squats in a row that have a good candlestick pattern are also a good reversal.