Bears Power Indices Technical Analysis and Bears Power Indices Trading Signals

Developed by Alexander Elder

Bears Power is used to estimate power of the Bears (Sellers). Bears Power estimates the balance of power between the bulls and bears.

This stock indices indicator aims at identifying if a bearish indices trend will continue or if the stock indices price has reached a point where it might reverse.

Calculation

A Indices Price bar has 4 parameters: the Opening, Closing, High and Low of the stock indices price bar.

Each Indices Price bar either closes higher or lower than the previous stock indices price bar.

The highest stock indices price will indicate the maximum power of the Bulls within a indices price period.

The lowest stock indices price will indicate the maximum power of the Bears within a indices price period.

This stock indices technical indicator uses the Low of the stock indices price and a Moving Average (Exponential)

The moving Average represents the middle ground between sellers and buyers for a certain stock indices price period.

Therefore:

Bears Power = Low Indices Price - Exponential Moving Average

Indices Technical Analysis and Generating Indices Trading Signals

Sell Indices Trading Signal

A sell stock indices signal is generated when the oscillator moves below Zero.

In a down indices trend, the LOW is lower than EMA, so the indicator is below zero and Histogram/Oscillator is located below zero line.

Exit Signal

If the LOW moves above the EMA then it means that stock indices price are starting to rise, the histogram rises above the zero line.

The Triple Screen method for this indicator suggests identifying the stock indices price indices trend on a higher chart interval (like daily time frame) and applying the bears power signals on a lower chart interval (like hourly time frame). Signals are traded according to the lower time frame but only in the direction of the long term indices trend in the higher chart timeframe.