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

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

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