Technical Agent

Status: Verified against code Last Updated: 2025-12-11

Role in Plain English

The Technical Agent is your chart analyst. It looks at price action, patterns, and indicators to answer one question:

"Based on the chart, should we go LONG, SHORT, or stay NEUTRAL?"

What It Analyzes

1. Multi-Timeframe Confluence

The agent analyzes alignment across multiple timeframes:

• Identifies when all timeframes agree (high confluence)
• Flags when timeframes conflict (mixed signals)

2. Support & Resistance Levels

The agent identifies price levels where the stock has previously:

• Bounced (support) — buyers stepped in
• Rejected (resistance) — sellers took control

Mike's 7-Timeframe Framework:

Timeframe	Minor Levels	Major Levels
1-Min	Last 30-60 min swings	Opening Range, PDC, PDH/PDL
3-Min	Last 1-2 hour swings	Opening Range, PDC, PDH/PDL
5-Min	Last 2-3 hour swings	Opening Range, PDC, PDH/PDL
15-Min	Last 2-3 day swings	Weekly H/L + Opening Range, PDC
1-Hour	Last 2-3 week swings	Monthly H/L
Daily	Last 2-4 week swings	52-week H/L
Weekly	Last 1-3 month swings	ATH/ATL

Key Reference Points (Always Checked):

• Opening Range (first 15 minutes high/low)
• PDC (Previous Day's Close)
• PDH/PDL (Previous Day's High/Low)
• Weekly/Monthly/Quarterly H/L
• 52-Week H/L
• All-Time H/L

Mike’s Entry Strategy (how the agent thinks):

• Buy at support (not at the break of resistance)
• After a breakout, prefer a pullback to support for entry
• Identify 2–4 minor levels and 2–3 major levels

3. Chart Patterns

Bullish (suggests LONG):

• Hammer candles / bullish engulfing
• Double bottom
• Bull flag
• Ascending triangle
• Inverse head and shoulders

Bearish (suggests SHORT):

• Topping tail candles / bearish engulfing
• Double top
• Bear flag
• Descending triangle
• Head and shoulders

4. SHORT-Specific Confirmation (CRITICAL)

When recommending a SHORT direction, the Technical Agent applies extra validation:

Check	Requirement
Resistance holding	Must have multiple rejections, not just one touch
Pattern complete	Bearish pattern must BREAK below support, not just form
Confidence adjustment	If Macro shows risk_on, reduce confidence by 20%
Entry type vocabulary	Use "bounce_after_breakdown" or "resistance_rejection" (NOT "pullback_after_breakout")

SHORT-specific confirmation rules:

• Verify resistance is holding (multiple rejections)
• Require the bearish pattern to be complete (break below support), not just forming
• If the pattern is not complete yet, reduce confidence
• If Macro is risk_on, reduce confidence by 20%
• Use SHORT-specific entry-type vocabulary

5. Volatility Regime (Mike's Definition)

Condition	Definition
Volatile Day	Intraday range > 25% above 30-day ATR
Normal Day	Intraday range within 25% of ATR
Low Volatility	Intraday range below 30-day ATR

Impact: Wider stops/targets for high volatility, tighter for low.

6. Volume Analysis (Mike's Rules)

Condition	Definition
Volume Spike	Current bar > 25% above average
Strong Volume Day	Today's volume > 25% above 30-day average

Impact: Price moves WITH volume = higher conviction.

7. Options Flow Analysis (If Available)

Data Point	What It Tells Us
GEX (Gamma Exposure)	Magnetic price levels
Put/Call Ratio	<0.7 = bullish, >1.0 = bearish
Near-Money OI	Support/resistance from options positioning

The Entry Philosophy

This is Mike's core methodology embedded in the agent:

"Buy at support, not the breakout."

The agent is trained to:

1. Wait for pullback — Don't chase breakouts
2. Enter at support — Let price come to you
3. Full position at support — Commit with conviction, not scale in gradually
4. Focus on risk first — "How much will I lose if wrong" before "How much will I make"

For LONGS:

• Enter on pullback AFTER breakout (not the breakout itself)
• Buy at SUPPORT levels (not break of resistance)

For SHORTS (Inverse Logic):

• Enter on bounce AFTER breakdown (not the breakdown itself)
• Short at RESISTANCE levels (not break of support)
• Wait for price to come UP to you at resistance

What It Outputs

The Technical Agent returns a JSON verdict with these fields:

Core Fields

Field	Values	Description
direction	long / short / neutral	Primary trading direction
confidence	0-100	Minimum 40% if ANY data exists
entry_type	see below	How to enter the trade

Entry Type Values:

• pullback_after_breakout — For LONGS
• support_bounce — For LONGS
• pattern_completion — Either direction
• bounce_after_breakdown — For SHORTS
• resistance_rejection — For SHORTS

Support/Resistance Levels (Nested Structure)

"support_levels": {
  "minor": [price1, price2, price3, price4],
  "major": [price1, price2, price3],
  "key_references": {
    "pdc": price,
    "pdl": price,
    "opening_range_low": price,
    "weekly_low": price,
    "monthly_low": price
  }
},
"resistance_levels": {
  "minor": [price1, price2, price3, price4],
  "major": [price1, price2, price3],
  "key_references": {
    "pdh": price,
    "opening_range_high": price,
    "weekly_high": price,
    "monthly_high": price
  }
}

Additional Fields

Field	Values	Description
chart_patterns	["pattern1", "pattern2"]	Patterns identified on chart
mtf_alignment	aligned / mixed / conflicting	Multi-timeframe agreement
volatility	low / normal / high / extreme	Current volatility regime
options_flow	bullish / bearish / neutral / unavailable	Options flow sentiment
reasoning	["factor1", "factor2", "factor3"]	Specific observations with evidence

Minimum Confidence Rule

• If you have SOME data (even partial), provide at least 40% confidence
• Only use 0% confidence if you have NO data at all
• Partial data = partial confidence, not zero confidence

Asset-Specific Behavior

STOCKS

Full indicator suite available (RSI, SMA, EMA, MACD) + chart patterns + historical bars + VWAP from snapshot.

VWAP (Volume Weighted Average Price):

• Pulled from the snapshot data (intraday VWAP)
• Acts as dynamic intraday support/resistance
• Price above VWAP = bullish bias
• Price below VWAP = bearish bias

OPTIONS

• Analyzes the underlying stock first (full indicators + VWAP)
• Direction determines CALL vs PUT
• Also analyzes options chain: greeks, IV, OI
• Contract selection happens in Supervisor Agent

FUTURES

Focuses on:

• Price action from bars
• Support/resistance from swing highs/lows
• Volume patterns
• Session data (open, high, low, close, volume)

CRYPTO

Full indicator suite (RSI, SMA, EMA, MACD) + 24/7 volume patterns.

Note: ES futures correlation check happens in Wild Card Agent for crypto trades.

How Its Opinion Gets Used

The Technical Agent's verdict goes to the Supervisor Agent, which combines it with Macro and Wild Card verdicts.

Key rule: If Technical and Macro disagree, Technical wins because it has actual price data.

Implementation details are intentionally omitted from public documentation.