Stocks are hoping to finish in the green for a 7th straight session, as the S&P 500 is approaching its highest levels since May.
And as bleak as things looked just 2-3 weeks ago, it appears that this market is going to make another run at all-time highs…
But to be fair, it doesn’t really matter if stocks are moving up, down, or sideways.
Because I’ve got a strategy for all market conditions…
“Markets tend to overshoot themselves… and sentiment does too. We got very negative all of a sudden…and expecting a bounce of some sorts is very possible from here.” ~ Jeff Bishop, 6/4
That said, there is no denying the current trend is bullish. And my opinion, no one is seeing or reading this market better than my WMM colleague, Nathan Bear.
Last week he had 15 +100% options winners… including a couple of winners in MDB that returned over 1,000%
That said, today we’re going to explore one of his setups, the TTM squeeze play., find out what it’s all about, how it works, and finish it off with a real money case study.
If you didn’t hear last week, Nathan Bear (my partner in Weekly Money Multiplier) knocked down 15 +100% winners last week!
This week, he’s back at it… knocking down the coveted 10 bagger… not once… but twice – something many traders have never achieved (including myself). In other words… Nathan made 10X his money on two of his positions.
Now, Nathan’s stellar performance put us at 50+ triple-digit winners… and it’s not even the second half of the year yet.
You might be wondering, “Jeff, how can I spot 10 baggers.”
Well, those are really rare to hit… however, Nathan isn’t a stranger to hitting +100% winners, as I’m not too. What’s interesting about Nathan’s approach is the fact that most of his options trades involves the squeeze.
You might be thinking we’re talking about a short squeeze here… the shorts are on the wrong side of the market and the buyers come in… and drive the stock higher, and the shorts get “squeezed”.
However, the squeeze we’re talking about is an indicator, known as the TTM Squeeze – a very important part of Nathan’s three-step system known as TPS.
You’ll see the TTM Squeeze on all of Nathan’s charts… no matter what timeframe, whether it be day trades… swing trades.
It’s his edge in the market.
Basically, what the squeeze tells you is when there’s a compression in volatility or price action.
He uses the squeeze to time his entries and his exits.
Here’s a look at what we’re talking about here (don’t worry about what stock it is… we’re just focused on the indicator here and how it can help your trading).
Notice the bars…
You’ll see there are light blue bars, red bars, yellow bars, and dark blue bars.
When you see the light blue bars going up… that means the stock has positive and is gaining momentum… on the other hand, when you see the dark blue bars, that means the stock has positive momentum, but it could be losing steam (momentum is going down).
Now, when the bars turn red (breaking below the zero line)… that means the stock has negative momentum… and gaining in negative momentum, which could be an indication to get out of the stock or options if you’re long.
When it goes to yellow, that means it still has negative momentum… but it’s losing negative momentum.
If you look at the TTM Squeeze, it’s almost like waves… and you can ride those waves if you know what you’re looking at.
If you look closely at the bars below the price chart… you’ll notice red and green dots.
Basically, what these red and green dots tell us is the volatility in the stock is compressing… and could be ready to make another move.
Well, what Nathan is focused on here are the red dots.
TTM Squeeze Case Study
Here’s a look at how Nathan knocked down a +100% winner with the TTM Squeeze.
If you look at the daily chart in Wix.com (WIX), you’ll notice those red dots… well, if you look at the price action, WIX has been on an absolue tear.
Not only that, the stock was forming a bull flag / bull pennant pattern.
Well, what do we know about the TTM Squeeze?
Those red dots could be an indication the stock was just taking a break and could get ready to run up again.
Now, just a few days later… here’s the chart Nathan sent out to clients, updating them on the position.
Here’s a look at how that trade turned out just a few days later…
That’s exactly what Nathan Bear was looking for… the stock to compress, and start to gain positive momentum.
Now, this is just one part of Nathan’s approach to trading options and consistently knocking down triple-digit winners. If you want to learn more about the TPS system, how to trade options, receive real-time email and text alerts… click here to get started.