Bull-and-bear-balance from OHLC bar patterns

Same-bar strength without a single formula

The construction infers same-bar bull and bear strength from the relationships among the previous close and the current open, high, low, and close rather than from a single fixed formula.

Bull-power is a same-bar quantity that measures upward reach from a case-specific reference chosen by how the current open, high, low, and close sit relative to the previous close. Bear-power is the complementary same-bar quantity that measures downward reach from a case-specific reference chosen by the same OHLC relationships.

The construction is presented as an alternative estimation of bull and bear balance that is intended to avoid drawbacks attributed to two earlier, similarly named power-balance indicators.

A pattern-specific-calculation on each bar

Each bar is assigned one of eleven bull categories and one of eleven bear categories, then a category-specific power calculation is applied.

That assignment is a pattern-specific-calculation: a nested case assignment that maps each bar onto one of a finite set of bull and bear formulas instead of applying one fixed formula to every bar.

The same-bar case logic can be rewritten with intermediate named conditions so bull-power and bear-power remain separately reusable before they are subtracted.

From noisy power series to bull-and-bear-balance

The raw power series is described as noisy, so both series are averaged and one is subtracted from the other to form the finished balance. Bull-and-bear-balance is the difference of separately smoothed bull-power and bear-power, optionally smoothed again, used as the finished balance series.

One published implementation uses exponential-smoothing as a recursive average of length 20 on each power series and a second exponential average of length 5 on their difference.

Another published implementation subtracts bear-power from bull-power and then applies a 30-period moving-average to the difference for histogram-display. Histogram-display is a bar-style plot of the finished balance so the sign and magnitude of each bar are visually separable from a later overlay smoother.

A third published implementation smooths bull-power and bear-power separately with a 20-day moving-average, then smooths the difference with a 30-day moving-average, with both lengths adjustable without rewriting the formula.

An editorial reading of the finished line

Editorial: price-indicator-divergence is a chart condition in which price structure and the finished balance line fail to confirm each other, treated as a hypothesis rather than a rule. The archive describes how the balance series is built. It does not turn a mismatch with price into a trading instruction.