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BOP values between Daily and Weekly charts Rate this Topic:
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jadeluca
Posted : Monday, July 09, 2012 4:23:40 PM
Gold Customer Gold Customer

Joined: 5/9/2011
Posts: 80

 

Could you please look at the symbol ESSX and compare the BOP values between the weekly chart and the daily chart for the time period starting in March 2012 to present....
 
Why iare mostly all the BOP values Green in the Daily Chart from March 2012 to present while
for the same time period in the weekly chart the values are red?
 
Please help since this makes no sense to me at all.
 
Thanks,
Jim
Bruce_L
Posted : Monday, July 09, 2012 4:42:32 PM


Worden Trainer

Joined: 10/7/2004
Posts: 58,655

It is not unusual for technical indicators to be positive in one time frame and negative in another time frame. Most technical indicators, including Balance of Power (BOP), are created using the open, high, low, close and volume from the time frame in which they are plotted. A daily BOP is calculated using only daily bars and a weekly BOP is calculated using only weekly bars.

BOP is a proprietary indicator and I could not say how it was calculated. That said I'll make a casual observation. Try adding Volume as an indicator to your chart. Look at the daily chart for ESSX and go back a few bars before the start of March. To me anyway, it looks like the longer bars are mostly green. Now look at the weekly chart and also look back a few bars before the start of March. This time the longer bars look mostly red to me.



-Bruce
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jadeluca
Posted : Thursday, July 12, 2012 1:31:10 PM
Gold Customer Gold Customer

Joined: 5/9/2011
Posts: 80

Bruce,

If you look at the BOP on the Daily Chart from March to June of 2012, BOP is all 99% Positive or Green... Then, if you look at the same time period on the Weekly Chart the values are Red. I don't see how when you sum up the aggregate of BOP which is all positive in this time frame how it can become negative within the same time period given the same interval of summation?

Plus, If characteristics of Instituitional buying are done off line with dark pools, then price action might be driven by other participants such as small lot investors and retail investors that directly affect price. Therefore, volume that is red or green doesn't correlate well with red or green BOP?

So, total volume is captured at the end of the day when all reporting is done. Yet, the exchange activity has driven price. Thus, volume can be negative while Instituitions are buying hand and fist...

There seems to be something wrong with the logic of the formula while moving from different time periods especially from daily to weekly.

Jim

Bruce_L
Posted : Thursday, July 12, 2012 1:52:47 PM


Worden Trainer

Joined: 10/7/2004
Posts: 58,655

Dark pools have absolutely nothing to do with Balance of Power (BOP). As stated in my original response, BOP is created entirely using the open, high, low, close and volume from the time frame in which it is plotted. Any trading that is not reflected in this data is not used in calculating BOP.

This means weekly BOP is not an aggregate of daily BOP. Instead, weekly BOP is calculated on weekly price and volume with weekly price and volume being an aggregate of daily price and volume.



-Bruce
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Gone South
Posted : Thursday, March 28, 2013 10:39:57 AM
Gold Customer Gold Customer

Joined: 1/28/2012
Posts: 51

Hi Bruce,

I know you're hamstrung trying to explain the behavior of an indictor that you can't define (Worden's proprietary formula), but I too don't get the difference between Daily and Weekly BOP.

Look at SPY for the last month...

DAILY BOP has been negative every single day since Feb. 7, (including -30 and lower every day from Feb. 20 to March 12).

WEEKLY BOP has been positive (including 30+ the weeks of March 1 and March 8) for the entire month of March.

If we look specifically at the week ending March 8, it was a huge week for price rises and, sure enough, the weekly BOP is 31. Yet every single daily BOP was strongly negative: -36, -35, -48, -48, -32

So what's a TC2000 user to think? Was the Smart Money accumulating or distributing? Looking at the price chart and volume, I'd guess accumulating, but then why the red Daily BOP?

Can you give us the keys to the car without telling us what's under the hood? If not, I can't see how we can interpret BOP in a useful way.

Thanks, again.

 

Bruce_L
Posted : Thursday, March 28, 2013 10:50:58 AM


Worden Trainer

Joined: 10/7/2004
Posts: 58,655

I've tried explaining it in as much detail as I can. You can read through the Basic Info on BOP, TSV and MoneyStream topic, but there really is nothing more in the way of additional details to offer.

I'll try to state it as simply and explicitly as possible. Indicators (including price and volume themselves) can be bullish in one time frame and bearish in another time frame. Balance of Power is no different than any other indicator in this regard.

That is a basic concept that needs to be understood when interpreting any indicator (not just BOP). Try to accept it instead of struggling with it. Trying to figure out exactly why this is the case is fairly pointless as it is just fundamental to the nature of how price (and pretty much any other indicator) behaves. Price can and will retreat from its long term trend in the short term.

Now I'm going to go beyond the things I normally say and into the realms of actually giving trading advice (albeit relatively obvious trading advice that has been repeated by the Wordens on many occassions). If you get mixed or confusing signals that you can't interpret, move on to a stock with less ambiguous signals.



-Bruce
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steverino
Posted : Monday, January 20, 2014 9:52:32 PM
Gold Customer Gold Customer

Joined: 2/5/2008
Posts: 15

My problem with the discrepencies is that 9+ days of a daily value of 100 and a weekly of -100 can't be a helpful indicator. One thing is green to yellow or yellow to red green to red - but complete opposites?

Bruce_L
Posted : Tuesday, January 21, 2014 5:04:18 PM


Worden Trainer

Joined: 10/7/2004
Posts: 58,655

Very similar things can happen with other indicators. It is the nature of indicators that there will be divergences between daily and weekly results for the same indicator with otherwise identical settings.

Take for a Williams %R5 on a daily and weekly time frame. There are quite a few symbols which have very high values for daily and very low values for weekly (AGM.A is 0 and -94.05 for example) or very low values for daily and very high values for weekly (CATYW is -100 and -2.8 for example).



-Bruce
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