The “2-Stage Crack in Correlation” is a core validation mechanism used to identify genuine trend reversals. A true reversal requires two consecutive cracks in correlation to effectively filter out market fake-outs:

1. Stage 1 (Early Warning): The first crack in correlation occurs (e.g., an SMT divergence). This typically signals that the current trend’s momentum is exhausting or that a liquidity purge is taking place.
2. Stage 2 (Final Confirmation): The second crack in correlation occurs (e.g., a PSP confirmation). This marks a substantive shift and breakdown in the overall market structure.
   In practical trading, a single crack in correlation is insufficient to establish a reversal. Only when both stages (the early warning and the final confirmation) occur sequentially and validate each other can a high-probability, genuine trend reversal be confirmed.

This indicator allows you to display your configured SMT and PSP timeframes on lower timeframes, automatically matching and plotting all 2-stage cracks in correlation directly on your chart. It effortlessly identifies multiple 2-stage cracks in correlation across other timeframes that are typically hard to spot, saving you a significant amount of time scanning the charts. Additionally, it highlights the CISD levels and features built-in alerts.