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. How to Find Us on Bloomberg: ERLN

Factor Interpretations © 2009 Phil Erlanger Research Co., Inc.

Patterns To Recognize in a 38 Factor Model: 5^38364,000,000,000,000,000,000,000,000.

5^2 = 25 5^3 = 125 5^4 = 625 5^5 = 3,125 5^10 = 10,000,000 © 2009 Phil Erlanger Research Co., Inc.

Erlanger Model: 2 Factors

Sentiment Who Is The Majority At Risk? © 2009 Phil Erlanger Research Co., Inc. Question:

Price Action How Is The Market Treating The Majority? © 2009 Phil Erlanger Research Co., Inc. Question:

SQUEEZE PLAY Majority is Short but…. Price is Advancing © 2009 Phil Erlanger Research Co., Inc. Short Squeeze:

SQUEEZE PLAY Majority is Long but…. Price is Declining © 2009 Phil Erlanger Research Co., Inc. Long Squeeze:

Price Action TREND INDICATORS SEASONALITY © 2009 Phil Erlanger Research Co., Inc. Focus on:

Trend Indicators DMA (Displaced Moving Avg.) CHANNEL ERLANGER TREND DIRECTION RELATIVE STRENGTH © 2009 Phil Erlanger Research Co., Inc. Focus on:

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

Seasonality  Only indicator you can see ahead of time!  Data on stocks, ETFs, groups, sectors and indices (even the VIX.)  Can be tested for validity and consistency  Doesn’t cause moves, reflects tendencies © 2009 Phil Erlanger Research Co., Inc.

Seasonality

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.

Sentiment Short Interest Data:  Data on most stocks  Released Bi-Monthly with delay of 10-days  Reflects Intermediate time frame Equity Options Activity:  Stock Specific  Universe = Optionable Stocks  Reflects Short-Term time frame  Reflects Raw (speculative) sentiment © 2009 Phil Erlanger Research Co., Inc.

Sentiment - Short Interest Data  Short Ratio = Current Shorts / Average Daily Volume  Erlanger Short Ratio = Current Shorts / 12-month Avg. of Average Daily Volume © 2009 Phil Erlanger Research Co., Inc.

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 – MU © 2009 Phil Erlanger Research Co., Inc.

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 :  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 :  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 %

Market Commentary Mega Declines: The Bad %

Market Commentary Mega Declines: The Ugly % %

Market Commentary © 2009 Phil Erlanger Research Co., Inc.

Market Commentary % 37.72% 81.01%

Market Commentary

Phil Erlanger Research Co., Inc. 2 Clock Tower Place, Suite 240 Maynard, MA Tel.: Fax: How to Find Us on Bloomberg: ERLN