P3 Squeeze Trade

This trade is illustrated in the Price Surge book starting on page 55.
A recent P3 trade occurred in January in Verizon.

On the morning of Jan. 17th, Verizon appeared to be reversing its

recent down trend by closing at the upper end of the 1st hour bar.
The P3 'Squeeze' pattern was formed by the PPO line (identified by the
purple line) almost touching the ADX line (identified by the black line).
When these 2 lines come together on a chart, they form the typical P3
Squeeze pattern.
Before a Price Surge trade can occur, the PPO line (thick purple line)
must cross the PPO Signal line (thin blue line). As we can see in the
chart above, Verizon basically met this requirement on the 1st hour
bar.
Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

The entry for the P3 trade came the next day when the Plus DI line
(identified by the green line) crossed above the Minus DI line
(identified by the red line).
The 42.5 Call option expiring on Jan. 25th was trading at .42.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

Four days later the trade was closed for a gain of 80%.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

Another P3 trade occurred in February in Baxter Int'l.

As with every P3 trade, it all starts with the 'Squeeze' pattern.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

Next, for a P3 trade entry to occur, the PPO line (purple line) must
cross above the PPO Signal line (blue line) and the Plus DI line (green
line) must cross above the Minus DI line (red line).
The 67.5 Call option expiring on March 16th was trading at .70.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

The next day, the trade was close with a gain of 40%.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

P3 Trade (short)
This trade is illustrated in the Price Surge book starting on page 84.
A recent P3 and 1/2 trade occurred in January in Under Armour.

In this 60-minute chart of Under Armour, the dashed lines illustrate

how the PPO line (purple line) runs parallel to the ADX line (black line).
It's during this period that the stock is setting itself up for a possible
decline.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

Before this parallel period comes to and end, minus DI must begin to
rise.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

I didn't discuss this in the Price Surge book, but it's about this time
that the CCI Indicator rises above +100 and then declines below it.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

And finally, the entry signal comes when the PPO line (purple line)
crosses down below the PPO signal line (blue line).
On January 4th, at 2:30 PM Eastern Time, the 50 Put expiring Jan. 9th
was trading at 1.56.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

Five days later on Jan. 9th the trade was closed out with a gain of just
over 70%.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

Another P3 and 1/2 trade occurred in February in Barrick Gold.

The potential for a decline is set up by the parallel pattern between the
PPO line (purple line) and the ADX line (black line).

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

It's during this parallel period that the minus DI must begin to rise.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

The CCI Indicator rose nicely above +100 and has since declined
below it.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

The PPO line (purple line) crossing down below the PPO signal line
(blue line) is the signal to enter the trade
On February 7th, at 2:30 PM Eastern Time, the 33 Put expiring Feb.
16th was trading at .71.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com

Four days later the trade was closed for a gain of just over 50%.

Wendy Kirkland
Copyright 2013 - All Rights Reserved
PriceSurgeSystem.com | Info@PriceSurgeSystem.com