Video summary

Quarterly Theory Bootcamp │ SMT & Sequential SMT (SSMT) EP. 3

Main summary

Key takeaways

Educational

Main ideas / concepts

  • Quarterly Theory Bootcamp (Episode 3) introduces SMT divergence, then builds it into Sequential SMT (SSMT) as a timing tool for market moves (reversals and retracements).
  • Core premise: closely correlated assets should move “in sync.” When they diverge at important levels (shared prior highs/lows), it signals relative strength/weakness and often precedes major (or smaller) turning points.

SMT divergence (foundation)

What to look at

  • Use triads (three highly correlated assets) or at least two assets.
    • Example (indices): NQ, ES, YM
    • Example (Forex triad): EURUSD, GBPUSD, DXY
    • Other triads mentioned: industry triad, commodities triad (including switching metals like copper/platinum), oil triad, crypto, interest rates.

How divergence is defined

Divergence occurs when:

  • One asset fails to take out a specific prior high/low formed at a specific time, while
  • A closely correlated counterpart does take it out (creating the “opposite” result).

Requirement for validity:

  • The high/low being tested must be the same specific extreme (e.g., the 7:00 AM yesterday low on the hourly chart).
  • The divergence typically shows as:
    • One asset makes a higher low while another makes a lower low (or analogous logic for highs).

Expected implication of SMT divergence

  • SMT divergence usually appears before major reversals and also often before smaller retracements that last hours.
  • It indicates relative strength/weakness.
    • Example idea: ES takes out the low while ENQ fails, implying a directional bias (often “move higher” in the described case).

Special note for Forex (inverse correlation)

  • For DXY, which moves opposite EUR and GBP:
    • Apply the same logic but with inversion (e.g., mark the EUR/GBP level corresponding to DXY’s opposite move).

Sequential SMT (SSMT) — the main methodology

Definition

  • Sequential SMT is SMT between two consecutive quarters in the trading “cycle” framework.
  • Quarters occur within a 4-quarter cycle: Q1 → Q2 → Q3 → Q4 → Q1 …

Key constraint: “consecutive only”

Valid sequences:

  • Q1 & Q2
  • Q2 & Q3
  • Q3 & Q4
  • Q4 & next Q1

Invalid:

  • Anything that skips a quarter (e.g., Q1 to Q3).

“True open” and manipulation filtering

  • To confirm manipulation, sequential SMT should be filtered by true opens (from the earlier cycle framework taught in the series).
  • Bullish ideal condition: manipulation occurs below the true open.
  • Bearish ideal condition: manipulation occurs above the true open.
  • If manipulation isn’t clear, the speaker suggests waiting until price:
    • runs the previous quarter extreme, and
    • sequential SMT forms in the correct relation to the true open.

What price extremes can be used

  • Sequential SMT is checked only using the absolute extreme of the previous quarter:
    • the very highest high or very lowest low.
  • No “random” interim highs/lows qualify.

Timeframes / “quarter-to-quarter” nesting (table concept)

SSMT can be applied across many cycles using the same consecutive-quarter logic, but with different window sizes. The speaker lists timeframes like:

  • Quarterly cycle (example ladder):
    • 1 month (yearly cycle)
    • 1 week (yearly)
    • Daily (quarterly)
    • Monthly (monthly)
    • 4 hour
    • Weekly
    • 1 hour
    • Daily / 15-minute
    • 90-minute
    • 5-minute
    • Micro / 1-minute

Candle-based simplification

Because each quarter spans a fixed duration, the method can be visualized with larger candles:

  • Example (daily cycle):
    • Daily cycle quarter ≈ 6 hours
    • So use 6-hour candles
    • Then SSMT becomes: SMT between two consecutive 6-hour candles
  • Similarly:
    • Weekly cycle sequential SMT on daily candles
    • Monthly cycle sequential SMT on weekly candles
    • Quarterly cycle sequential SMT on ~3.25-week candles (generally not used)

Timing detail: extremes don’t have to match in time across assets

  • In SSMT you do not need both correlated assets to tag their extremes at the exact same minute.
  • What matters:
    • mark the previous quarter’s absolute high/low for each asset (or the extreme level within the relevant window),
    • then confirm one asset runs above while the other fails (or analogous run below / fail logic).

Practical “use” workflow (as described)

  1. Determine bias from the higher-timeframe cycle (e.g., weekly bias).

  2. Wait for the expected manipulation quarter (ideally above/below the true open depending on bullish/bearish).

  3. Confirm with Sequential SMT.

  4. Trade consistent with the narrative sequential SMT implies:
    • manipulation
    • then often distribution / continuation higher in bullish contexts
    • or a reversal when opposing sequential SMT appears.

Chart-based lessons / observations from the example(s)

  • The speaker uses indices triads (ES and YM with references to NQ) and an “Oracle Insights quarterly theory indicator” that:
    • marks true opens and quarters
    • marks sequential SMT
  • Claim/observation:
    • Sequential SMT is “almost always” present before moves (retracements, reversals, continuation signals).
  • Cycle behavior and expectations:
    • A “clean cycle” typically shows one sequential SMT per cycle.
    • Then the following quarter tends to distribute (speaker’s preferred market behavior).
    • Back-to-back multiple sequential SMTs can signal lower-probability / choppier conditions.
  • Multi-timeframe confirmation:
    • Use a higher timeframe sequential SMT (e.g., weekly)
    • Confirm with a lower timeframe sequential SMT (e.g., daily or 90-minute)
    • Caution on going too low too fast:
      • weekly → daily or weekly → 90-minute (OK)
      • avoid jumping weekly → micro (their caution)

Trading stance (decision rule)

  • The speaker says they don’t take a trade until they see at least one sequential SMT.
  • They recommend:
    • find bias/narrative
    • wait for sequential SMT confirmation
    • then look for the aligned entry model (referenced as covered in later episodes)

Sources / speakers (identified)

  • Speaker / Host: The unnamed presenter of the video (referred to as “guys,” “I,” “my” throughout).
  • Software / Tool mentioned: Oracle Insights Quarterly Theory Indicator (marks true opens, quarters, sequential SMT).
  • Video series / author references: “Quarterly Theory Bootcamp” (series name; no separate person named).

Original video