Elder Ray Index
Measures the power of bulls (high minus EMA) and bears (low minus EMA) relative to an exponential moving average to gauge trend and momentum together.
Bull Power = High − EMA(13); Bear Power = Low − EMA(13)
Developed by Dr. Alexander Elder, the Elder Ray Index splits into two components: Bull Power (bar high minus the 13-period EMA) and Bear Power (bar low minus the 13-period EMA). Positive Bull Power means bulls pushed price above the trend; negative Bear Power means bears pushed it below.
Elder used it as a three-screen confirmation: first identify the weekly trend, then trade in its direction on the daily when Bear Power (for longs) is negative but rising. A Bear Power reading crossing zero from below warns against new longs. The indicator rewards traders who combine it with trend context rather than using it in isolation.