20 Elder Ray Index (eri)

Two metrics are calculates: BULLPOWER (high - EMA(close, length))(green line) and the BEARPOWER (low - EMA(close, length))(red line). It can be reduced to a single line by BullBearPower=BullPower+BearPower (blue line).

Consider long positions if the bull power is rising, bear power is in negative territory and rising (getting weaker), and EMA is sloping upward (all uptrend signals).

If the EMA is sloping downward, the bull power is above zero and falling (weakening), and the bear power is falling, traders should consider short positions or selling.

Figure 8.32: Elder Ray Index