DOW vs BoP
In this section we’ll look at another DOW relationship, but this time with the Balance of Power (BoP).
The DOW/S&P and Nasdaq are inversely correlated to Flow. However, the BoP is positively correlated to the indexes and gives us additional insights into price action. The chart below provides us with some information […]
The important thing to keep in mind about the BoP is that it’s a visual representation of herding in the financial markets and when a new rally or decline is starting it always starts from the very first column on the left because it’s the most recent representation of herding activity and as more and […]
A bull or bear ‘trap’ is a very powerful formation in the BoP that indicates that the market will likely reverse the current day’s move the very next day.
A ‘bear trap’ is large space between the 1st column and a cell filled in on one of the 4th, 5th or 6th columns and nothing […]
A long tail is when there are ‘1’ markings in the last column of the BoP on the bullish side or bearish side and no other 1’s in any of the other columns. This typically marks the end of the bullish or bearish herding, especially if there’s been trending for an extended period of time. […]