Who is in Control … the Bulls or the Bears?
You could almost call this a Bull/Bear Ratio.
What is it?
It is our Leadership Stock Ratio which measures the difference between our Bull and Bear Ratios that are calculated from over 7,000 stocks. Each night, we analyze and count the number of stocks that are positive, negative, gaining strength, and/or losing strength at multiple strength levels. After the computers crunch those numbers for the current day, we get the actual stock counts fitting each criteria and then set out to calculate our Ratios.
It turns out, that the difference between our Bull and Bear Ratios is a really good indicator for who has the power … the Bulls or the Bears.
When the Leadership Ratio is zero, the Bulls and Bears equally offset themselves for a Neutral condition. Above zero and trending higher means that the Bulls have the advantage and that the market will rally higher. Below zero and trending lower means that the Bears have the advantage and that the market will move lower.
There is one more piece to the equation … and that has to do with the market Strength level when the Leadership Ratio is at or close to zero as you will see below.
So, where does the Leadership Ratio stand now?
At the close yesterday, the Ratio was +0.16 … about as close to zero as you can get. So essentially, the Bulls and Bears are about equal in numbers. But, the New York Stock Exchange’s Strength showed us a C-RSI reading of +11.16. So, even though the Bulls and Bears were equal in Ratio numbers, the Bulls were stronger … and that gives the advantage to the