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The Art of the Squeeze Play
How to Find Us on Bloomberg: ERLN <go> The Art of the Squeeze Play Presented by: Philip B. Erlanger, CMT Phil Erlanger Research Co., Inc February, 2009 © 2009 Phil Erlanger Research Co., Inc. Factor Interpretations © 2009 Phil Erlanger Research Co., Inc. Patterns To Recognize in a 38 Factor Model: 5^38 364,000,000,000,000,000,000,000,000. © 2009 Phil Erlanger Research Co., Inc. 5^2 = 25 5^3 = 125 5^4 = 625 5^5 = 3,125 5^10 = 10,000,000 Erlanger Model: 2 Factors Observing 2 Factors Price Action Sentiment © 2009 Phil Erlanger Research Co., Inc. Sentiment Question: Who Is The Majority At Risk? © 2009 Phil Erlanger Research Co., Inc. Price Action Question: How Is The Market Treating The Majority? © 2009 Phil Erlanger Research Co., Inc. SQUEEZE PLAY Short Squeeze: Majority is Short but…. Price is Advancing © 2009 Phil Erlanger Research Co., Inc. SQUEEZE PLAY Long Squeeze: Majority is Long but…. Price is Declining © 2009 Phil Erlanger Research Co., Inc. Price Action Focus on: TREND INDICATORS SEASONALITY © 2009 Phil Erlanger Research Co., Inc. Trend Indicators Focus on: DMA (Displaced Moving Avg.) CHANNEL ERLANGER TREND DIRECTION RELATIVE STRENGTH DMA Channel – MU DMA Channel – MU DMA Channel – WorldCom © Phil Erlanger Research Co., Inc. DMA Channel – S&P 500 © Phil Erlanger Research Co., Inc. Trend Direction – S&P 500 Relative Strength – Amgen Relative Strength – Amgen Relative Strength – Amgen Relative Strength – Amgen © 2009 Phil Erlanger Research Co., Inc. ¾ Only Seasonality indicator you can see ahead of time! ¾ Data on stocks, ETFs, groups, sectors and indices (even the VIX.) ¾ Can be tested for validity and consistency ¾ Doesn’t cause moves, reflects tendencies Seasonality Seasonality Seasonality Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality © 2009 Phil Erlanger Research Co., Inc. Seasonality Sentiment Short Interest Data: ¾ Data on most stocks ¾ Released Bi-Monthly with delay of 10-days ¾ Reflects Intermediate time frame Equity Options Activity: ¾ Stock © 2009 Phil Erlanger Research Co., Inc. Specific ¾ Universe = Optionable Stocks ¾ Reflects Short-Term time frame ¾ Reflects Raw (speculative) sentiment Sentiment - Short Interest Data ¾ Short Ratio = Current Shorts / Average Daily Volume ¾ Erlanger © 2009 Phil Erlanger Research Co., Inc. Short Ratio = Current Shorts / 12-month Avg. of Average Daily Volume Short Interest Data – S&P 500 © 2002 Phil Erlanger Research Co., Inc. Short Interest Data – S&P 500 © 2002 Phil Erlanger Research Co., Inc. Short Interest Data – S&P 500 Short Interest Data – S&P 500 Short Interest Data – S&P 500 Short Interest Data – S&P 500 © 2009 Phil Erlanger Research Co., Inc. Short Interest Data – MU Amgen WorldCom Erlanger Type Classifications © 2009 Phil Erlanger Research Co., Inc. Erlanger Type Classifications © 2009 Phil Erlanger Research Co., Inc. Erlanger Squeeze Screens Groups and Sectors © 2009 Phil Erlanger Research Co., Inc. Groups and Sectors © 2009 Phil Erlanger Research Co., Inc. Groups and Sectors © 2009 Phil Erlanger Research Co., Inc. Groups and Sectors © 2000 Phil Erlanger Research Co., Inc. Options Options Weekly Seasonal Short Interest Technical Reports - SSIT Erlanger Seasonally Strong Ideas Report : ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ Positive 10, 20 and 40 days forward, seasonally Positive Seasonal Cycle R Positive Seasonal Average Heat Elevated Short Selling underway Trend Direction not in downtrend DMA Channel Status (Monthly, Weekly & Daily) Option Rank, Power Rank, RSI Sector Breakout Weekly Seasonal Short Interest Technical Reports - SSIT Erlanger Seasonally Weak Ideas Report : ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾ Negative 10, 20 and 40 days forward, seasonally Positive Seasonal Cycle R Negative Seasonal Average Heat Diminished Short Selling underway Trend Direction not in uptrend DMA Channel Status (Monthly, Weekly & Daily) Option Rank, Power Rank, RSI Sector Breakout Market Commentary We’re In A Tight Spot Market Commentary Mega Declines: The Good Market Commentary Mega Declines: The Good -41.16% Market Commentary Mega Declines: The Bad -46.59% Market Commentary Mega Declines: The Ugly -49.39% -84.49% Market Commentary © 2009 Phil Erlanger Research Co., Inc. Market Commentary 81.01% 37.72% -47.83% Market Commentary Market Commentary Market Commentary Market Commentary Market Commentary Market Commentary Market Commentary Market Commentary Market Commentary Market Commentary How to Find Us on Bloomberg: ERLN <go> www.ErlangerResearch.com Phil Erlanger Research Co., Inc. 2 Clock Tower Place, Suite 240 Maynard, MA 01754 [email protected] Tel.: 978-263-2536 Fax: 978-266-1104
SQUEEZE PLAY