$SPX Daily, 05/13/2014: Keltner Squeeze

INDEX:SPX   S&P 500 Index
361 8 6
A Keltner Squeeze occurs when the Bollinger Bands , the red bands on the chart, move inside the Keltner Channel, the blue bands on the chart. This happened over the past two sessions. The best signal comes when the $SPX             tags the upper Bollinger Band while inside the Keltners. This is what happened on Tuesday, May 13th.

I have marked with a yellow arrow the other times in the past year where this same set up occurred and you can see that in almost every instance there was some type of corrective action afterward. Sometimes, as in mid-May 2013, a tag of the upper BB is enough. Also note that in August 2013, after $SPX             had tagged the upper BB and began to pull back, that the pull back accelerated when the BB's pushed inside the Keltners

Be careful & GL
2 years ago
Do you observe it since a long time? Does it repaint? Please see for example 21.03.2014. Blue came over the red line and price entered consolidation, came with a new low and only then with new high.
I like it though, really, We're defo before a big move, missing VIX spike says we should draw new leg down very soon, but who knows?
CurtisM panbuk
2 years ago
panbuk, the idea of a Keltner Squeeze has been around for a long time. At the very least it is a warning of a potential market turn of one degree or another.

On 3/21, the red did indeed drop into the Keltner channel and nothing happened until $SPX rose up to tag the red Bollinger Band while it was inside the Keltners 0n 4/2 so that is an important part of this set up.

panbuk CurtisM
2 years ago
Thanks. I didnt ask about KC idea in general, i know it :)

I meant did you observe your chart since a long time in a way it's set up? You could simply make it today and mark those intersections as they are visible today, so it is unknown whether they were valid in the past as the indicators could simply repaint.

Or this chart is not today's and you can confirm that all those "signals" from the past were real, you confirmed them and could used them as part of your trading decision. Many thanks
CurtisM panbuk
2 years ago
panbuk, I don't look at this type of chart often but I noticed that others were looking at charts with Bollinger Bands so I just wanted to see what was going on with the KC's.

But this doesn't change the fact that all those signals from the past were real. To validate such a set up, go back even further, back test the setup and see how many times in the past the setup proved predictive. That's the only thing anyone can do.

Thanks for your comment & GL
2 years ago
Nice warning thanks
2 years ago
Thanks for the heads up, Curtis. Do you have a www site?
CurtisM JRG
2 years ago
Alexander & JRG, thanks for your comments.
2 years ago
Good Day.....breaking the 50 will be tough. I think QQQ and IWM pan up a little while DOW and SPX wiggle, then tap tap tap then snap. You have to laugh at the way they played the masses with a break of the 50 and then snap up over on Thursday and the tap tap on the 50 then the spurt end of day. One wonders if this is the week we see some real selling. I saw your TWM. My client is still long TWM with a lot of shares. He did not take profits on my recomendation on Thursday when market was max down... he wants to wait for the big drop. Do you have a target for your TWM? 400 500 sma ?
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