Elder-Rays (Bulls & Bears Power)
Posted: Sat Jun 19, 2010 11:09 am
Developed by Dr. Alexander Elder and described in his book “Trading for a Living”.
Consists of three components Bear Power, Bull Power, and a 13-periods exponential moving average.
13-day exponential moving average (EMA) indicate the market consensus of value.
Bull Power measures the ability of buyers to drive prices above the consensus of value.
Bear Power reflects the ability of sellers to drive prices below the average consensus of value.
Use exponential moving average’s slope to determine the market trend direction.
Bull Power = High[period] - EMA [period]
Bear power = Low[period] - EMA [period]
Long
In Uptrend, Bear Power is negative, but rising
Short
In Downtrend, Bull Power is positive, but declining