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The Art of the The Art of the Squeeze PlaySqueeze Play
Presented by:Presented by:
Philip B. Erlanger, CMTPhilip B. Erlanger, CMTPhil Erlanger Research Co., IncPhil Erlanger Research Co., Inc
February, 2009February, 2009
© 2009 Phil Erlanger Research Co., Inc.
How to Find Us on Bloomberg:
ERLN <go>
Patterns To Recognize in a 38 Factor Model:Patterns To Recognize in a 38 Factor Model:
5^385^38
364,000,000,000,000,000,000,000,000.364,000,000,000,000,000,000,000,000.
5^2 = 255^2 = 25
5^3 = 1255^3 = 125
5^4 = 6255^4 = 625
5^5 = 3,1255^5 = 3,125
5^10 = 10,000,0005^10 = 10,000,000
© 2009 Phil Erlanger Research Co., Inc.
Erlanger Model: 2 FactorsErlanger Model: 2 Factors
P rice A c tion S en tim en t
O b servin g2 F ac to rs
SentimentSentiment
Who Is The Majority At Risk?Who Is The Majority At Risk?
© 2009 Phil Erlanger
Research Co., Inc.
Question:Question:
Price ActionPrice Action
How Is The Market Treating The Majority?How Is The Market Treating The Majority?
© 2009 Phil Erlanger
Research Co., Inc.
Question:Question:
SQUEEZE PLAYSQUEEZE PLAY
Majority is Short but….Majority is Short but….
Price is AdvancingPrice is Advancing
© 2009 Phil Erlanger
Research Co., Inc.
Short Squeeze:Short Squeeze:
SQUEEZE PLAYSQUEEZE PLAY
Majority is Long but….Majority is Long but….
Price is DecliningPrice is Declining
© 2009 Phil Erlanger
Research Co., Inc.
Long Squeeze:Long Squeeze:
Price ActionPrice Action
TREND INDICATORSTREND INDICATORS
SEASONALITYSEASONALITY
© 2009 Phil Erlanger
Research Co., Inc.
Focus on:Focus on:
Trend IndicatorsTrend Indicators
DMA (Displaced Moving Avg.) CHANNELDMA (Displaced Moving Avg.) CHANNEL
ERLANGER TREND DIRECTIONERLANGER TREND DIRECTION
RELATIVE STRENGTHRELATIVE STRENGTH
© 2009 Phil Erlanger
Research Co., Inc.
Focus on:Focus on:
SeasonalitySeasonality
Only indicator you can see ahead of time!Only indicator you can see ahead of time! Data on stocks, ETFs, groups, sectors and Data on stocks, ETFs, groups, sectors and
indices (even the VIX.)indices (even the VIX.) Can be tested for validity and consistencyCan be tested for validity and consistency Doesn’t cause moves, reflects tendencies Doesn’t cause moves, reflects tendencies
© 2009 Phil Erlanger
Research Co., Inc.
SentimentSentiment
Short Interest Data:Short Interest Data: Data on most stocksData on most stocks Released Bi-Monthly with delay of 10-daysReleased Bi-Monthly with delay of 10-days Reflects Intermediate time frameReflects Intermediate time frame
Equity Options Activity:Equity Options Activity: Stock SpecificStock Specific Universe = Optionable StocksUniverse = Optionable Stocks Reflects Short-Term time frameReflects Short-Term time frame Reflects Raw (speculative) sentimentReflects Raw (speculative) sentiment© 2009 Phil Erlanger
Research Co., Inc.
Sentiment - Short Interest DataSentiment - Short Interest Data
Short Ratio = Current Shorts / Average Short Ratio = Current Shorts / Average Daily VolumeDaily Volume
Erlanger Short Ratio = Current Shorts /Erlanger Short Ratio = Current Shorts /12-month Avg. of 12-month Avg. of Average Daily Average Daily VolumeVolume
© 2009 Phil Erlanger
Research Co., Inc.
Weekly Seasonal Short Interest Weekly Seasonal Short Interest
Technical Reports - SSITTechnical Reports - SSIT
Erlanger Seasonally Strong Ideas Report :
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 Weekly Seasonal Short Interest
Technical Reports - SSITTechnical Reports - SSIT
Erlanger Seasonally Weak Ideas Report :
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
www.ErlangerResearch.comPhil Erlanger Research Co., Inc.Phil Erlanger Research Co., Inc.2 Clock Tower Place, Suite 2402 Clock Tower Place, Suite 240
Maynard, MA 01754Maynard, MA [email protected].: 978-263-2536Fax: 978-266-1104
How to Find Us on Bloomberg:
ERLN <go>