- TD Sequential is Tom DeMark's exhaustion counting system that identifies potential trend reversals through two phases: a 9-count Setup phase that d...
- No configurable parameters; computation is stateless per bar.
- Validated against TA-Lib, Skender, and Tulip reference implementations where available.
TD Sequential is Tom DeMark's exhaustion counting system that identifies potential trend reversals through two phases: a 9-count Setup phase that detects overextended trends, and a 13-count Countdown phase that pinpoints probable reversal timing. Unlike oscillators that measure momentum magnitude, TD Sequential counts consecutive qualifying bars, producing integer outputs (Setup: $\pm 1$ to $\pm 9$; Countdown: $\pm 1$ to $\pm 13$) that represent the progression toward exhaustion. A completed 9-count Setup followed by a completed 13-count Countdown signals high-probability trend exhaustion. All state is maintained in O(1) scalar variables with no buffers required.
## Historical Context
Thomas DeMark developed TD Sequential during the 1970s-1990s as part of his comprehensive market timing framework, published in *The New Science of Technical Analysis* (1994) and *New Market Timing Techniques* (1997). The indicator was conceived as a structural alternative to momentum oscillators: rather than measuring how overbought or oversold a market is, it counts how long a directional condition has persisted and identifies specific exhaustion points. DeMark's key insight was that trends exhaust at predictable counting thresholds (9 for Setup, 13 for Countdown), a pattern he validated across equity, fixed-income, commodity, and currency markets. The indicator found significant institutional adoption, with Bloomberg terminals providing native DeMark indicators and firms like Tudor Investment Corporation licensing the methodology. The compare period (typically 4 bars) determines the lookback for the close comparison: each Setup bar requires close above/below close[4], creating a structural requirement that the trend has been sustained for at least 4 additional bars beyond the count itself. The Countdown phase adds a higher bar: the close must exceed the high or low of 2 bars ago, a condition that doesn't occur on every bar, making the Countdown non-consecutive.
## Architecture & Physics
### Two-Phase State Machine
**Phase 1: Setup ($\pm 1$ to $\pm 9$)**
The Setup counter compares the current close to the close `comparePeriod` bars ago. If close > close[comparePeriod], the sell setup count increments (positive); if close < close[comparePeriod], the buy setup count decrements (negative). The count resets to zero when the condition breaks or reverses direction. Counts are clamped to $\pm 9$.
When the count reaches exactly $\pm 9$ for the first time (without having been reset), the setup is "complete" and Phase 2 begins. The setupComplete flag prevents re-triggering until a reset occurs.
**Phase 2: Countdown ($\pm 1$ to $\pm 13$)**
After a completed 9-count Setup, the Countdown phase begins. Unlike Setup, Countdown is non-consecutive: a sell countdown bar requires close > high[2]; a buy countdown bar requires close < low[2]. Only qualifying bars increment the countdown. The count progresses toward $\pm 13$, at which point the countdown completes and the directional signal resets.
An opposite 9-count Setup during an active Countdown resets and restarts the Countdown in the new direction.
### Zero-Buffer Design
The entire indicator state consists of four scalar variables: `setupCount`, `countdownCount`, `countdownDir`, and `setupComplete`. No circular buffers, arrays, or sliding windows are needed. The only historical lookback dependency is PineScript's `close[comparePeriod]`, `low[2]`, and `high[2]`.
| Sequential counter | **No** | State-dependent — each bar depends on prior count |
The counter state is inherently sequential. The individual comparisons are vectorizable in a pre-pass, but the sequential counting dependency prevents full SIMD acceleration.
