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- Balance of Market Power
- The strength of the bulls versus bears is measured by the ability of each to push prices to extreme levels. The Balance of Market Power indicator assigns a score to each based on the following reward values:
" Reward based on open measures the ability of each group to push opening price in opposite directions (bears down and bulls up).
" Reward based on close measures the ability of each group to push closing price in opposite directions (bulls up from the low price and bears down from the high price).
" Reward based on open close measures how each day finishes (up or down), the winning group gains and extra score.
Each reward is calculated to the full price movement for each day (HighPrice-LowPrice). Once each side has been calculated the daily reward is calculated for both the bulls and bears. The Balance of Market Power indicator is calculated as a difference between each sides daily rewards.
The Balance of Market Power is an oscillator and supports price divergence, trends, and overbought-oversold levels. It can also help to determine market trends. This indicator measures the velocity of the price trend and results can be less sustainable than a price trend because maintaining the same velocity of a trend is more difficult than the trend itself.
Further information on Balance of Market Power can be found in the August 2001 issue of Technical Analysis of Stocks and Commodities
http://www.traders.com
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- Beta Coefficient
The Beta Coefficient measures the systematic risk of a security. It is used to illustrate the relative volatility of a security (or portfolio) in comparison with the market as a whole. As the benchmark of this measurement, the market is defined of having a beta of 1.0.
A security with a Beta value >1.0 is indicative of a security that is more volatile than the market. A Beta <1.0 is then less volatile than the market. If the Beta = 1.0, the security's price is said to move along with the market.
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- Beta2
Beta2 is a measure of the systematic risk of a security, much like the Beta Coefficient. The difference between Beta and Beta2 being that instead of using the Simple Rate of Change, Beta2 uses the Moving Average of the Rate of Change in its calculation.
Remember, with either form of Beta, securities with a value >1.0 will be more volitile than the market. A Beta <1.0 is said to be less volatile than the market.
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- Bollinger Bands
Similar to Moving Average Envelopes, Bollinger Bands are plotted at 2 standard deviations above and below a 20-day exponential moving average. As standard deviation is a measure of volatility, the bands are self-adjusting: widening during volatile markets and contracting during calmer periods.
As a rule, prices are considered to be overextended on the upside ("overbought") when they touch the upper band. They are considered overextended on the downside ("oversold") when they touch the lower band. Using two standard deviations ensures that 95% of the price data will fall between the two trading bands.
The simplest way to use Bollinger Bands is to use the upper and lower bands as price targets. In other words, if prices bounce off the lower band and cross above the 20 day average, then the upper band becomes the upper price target.
A crossing below the 20 day average would identify the lower band as the downside target. In a strong uptrend, prices will usually fluctuate between the upper band and the 20 day average. In that case, a crossing below the 20 day average warns of a trend reversal to the downside.
As Bollinger Bands creator John Bollinger noted - a move that originates at one band tends to go all the way to the other band. This observation is useful when projecting price targets.
Information provided by John Murphy, author of Technical Analysis of the Financial Markets and The Visual Investor.
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- Breadth Thrust Indicator
The Breadth Thrust Indicator is a market momentum indicator. Calculated by dividing a 10-day exponential moving average of the number of advancing issues by the number of advancing plus declining issues, a "Breadth Thrust" occurs when the indicator rises from below 40% to above 61.5%. This indicates that the market has rapidly changed from an oversold condition to one of strength yet has not become overbought.
The Breadth Thrust Indicator was developed by Dr. Martin Zweig who points out that most bull markets begin with a Breadth Thrust. According to Zweig there have only been fourteen Breadth Thrusts in the S&P 500 since 1945 with an average gain of 24.6% following these Thrusts.
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real-time data |
delayed data |
end-of-day data
