1. Prepared & presented by Marty Nohe January 2011
The Squeeze Play
Prepared & presented by
Marty Nohe
January 2011

2. Disclaimer:
If something bad happens as a result of action taken based upon information presented, it ain’t my fault and you can’t sue me!
This “play” was devised by John Carter, a principal of Trade the Markets, Inc. via a 2-day seminar CD I purchased at a trade show.

3. The premise
Using the Bollinger Bands and the Keltner Channels together, provides timing for entrance and exit positions on an intraday & swing trades
Relies on premise that securities fluctuate between periods of high volatility, followed by low volatility

4. Bollinger Bands
In the 1980s John Bollinger introduced to the market his use and interpretation of a mathematical presentation of volatility with an upper and lower band, usually imposed on a tick chart. During 2010 he introduced 3 new indicators, based upon his original work.

5. Sample 1 BB Chart

6. Reading Bollinger Bands
When the bands are tight or closer together that is a period of low volatility, to be followed by higher volatility (higher price)

7. Ford-yesterday

8. Keltner Channels Overview
Developed by Chester Keltner –a technical indicator *Uses 2 lines, like Bollinger Bands *Adapts to changes in a stocks volatility *Generates buy signal when price crosses above upper band and sell signal when price crosses lower band

9. Bank of America

10. Sample 2 Keltner Channel

11. Using both BB & KC
Overlaying the BB over the KC is confirming that it is a “squeeze play” is valid
Once the BB compresses inside the KC, as it begins to exit the channel that is the buy signal

12. Sample 1 BB and Keltner

13. Sample 2 BB & Keltner

14. Momentum Indicator
This study measures velocity of price change for a fixed interval.
It is measured by subtracting the price at the beginning of the interval from the latest price
Buy signal when value starts to rise
Sell when values start to decrease

15. Putting it together
Graphic BB KC IMI 1

16. Putting it together
Graphic BB KC IMI 2

17. Putting it together
Graphic BB KC IMI 3

18. Settings Bollinger Bands 20 and 2 Keltner Chanel 20 and 1.5
Insert Zero line into momentum indicator
2 minute chart on directional days
5 minute chart on choppy days

19. Review & Conclusions
Using these 3 studies in concert produces approximately 70% success rate according to statistics compiled by Trade the Markets
Can be used any time, but unlike many methodolgies, it can be used during the “doldrums” part of the day (8:30-10:30 pac.)

20. Hints Enter the trade at the close of the candle only
Exit ½ the position when the trend is cresting
Watch the momentum Indicator to help when to get out of trade

21. Positive and False Readingsw

22. References/contacts John Carter: Trade the Markets
“Technical Analysis From A to Z” by Steven B. Achelis