1. 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

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

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

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

5. Erlanger Model: 2 Factors

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

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

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

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

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

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

12. DMA Channel – MU

14. DMA Channel – WorldCom © Phil Erlanger Research Co., Inc.

15. DMA Channel – S&P 500 © Phil Erlanger Research Co., Inc.

16. Trend Direction – S&P 500

17. Relative Strength – Amgen

21. 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.

22. Seasonality

23. Seasonality

24. Seasonality

25. Seasonality

26. Seasonality © 2009 Phil Erlanger Research Co., Inc.

27. Seasonality © 2009 Phil Erlanger Research Co., Inc.

28. Seasonality © 2009 Phil Erlanger Research Co., Inc.

29. Seasonality © 2009 Phil Erlanger Research Co., Inc.

30. Seasonality © 2009 Phil Erlanger Research Co., Inc.

31. Seasonality © 2009 Phil Erlanger Research Co., Inc.

32. Seasonality © 2009 Phil Erlanger Research Co., Inc.

33. Seasonality © 2009 Phil Erlanger Research Co., Inc.

34. Seasonality © 2009 Phil Erlanger Research Co., Inc.

35. 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.

36. 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.

37. Short Interest Data – S&P 500 © 2002 Phil Erlanger Research Co., Inc.

38. Short Interest Data – S&P 500 © 2002 Phil Erlanger Research Co., Inc.

39. Short Interest Data – S&P 500

43. Short Interest Data – MU © 2009 Phil Erlanger Research Co., Inc.

44. Amgen

45. WorldCom

46. Erlanger Type Classifications © 2009 Phil Erlanger Research Co., Inc.

47. Erlanger Type Classifications © 2009 Phil Erlanger Research Co., Inc.

48. Erlanger Squeeze Screens

49. Groups and Sectors © 2009 Phil Erlanger Research Co., Inc.

50. Groups and Sectors © 2009 Phil Erlanger Research Co., Inc.

51. Groups and Sectors © 2009 Phil Erlanger Research Co., Inc.

52. Groups and Sectors © 2000 Phil Erlanger Research Co., Inc.

53. Options

54. Options

55. 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

56. 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

57. Market Commentary We’re In A Tight Spot

58. Market Commentary Mega Declines: The Good

59. Market Commentary Mega Declines: The Good -41.16%

60. Market Commentary Mega Declines: The Bad -46.59%

61. Market Commentary Mega Declines: The Ugly -84.49% -49.39%

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

63. Market Commentary -47.83% 37.72% 81.01%

64. Market Commentary

74. www.ErlangerResearch.com Phil Erlanger Research Co., Inc. 2 Clock Tower Place, Suite 240 Maynard, MA 01754 phil@erlanger.com phil@erlanger.com Tel.: 978-263-2536 Fax: 978-266-1104 phil@erlanger.com How to Find Us on Bloomberg: ERLN