MA squeeze

With the 5-, 20-, 60- and 120-day averages all on the chart, they normally sit in layers well apart. This pattern is the day a tall green bar prints while those four have gathered onto one price. A 5-day average equal to the 120-day means the last few days average out the same as the last half-year, which is why this spot is usually the middle of a trading range.

The tall bar is required because the squeeze on its own is a day when nothing happened. Averages stay bunched for anywhere from days to months, so marking every bar of that stretch would bury the chart. What gets kept is the one day something pushed out of it — a bar whose body is larger than the symbol's own recent daily range. If that bar also carries swollen volume and no wicks, the marubozu breakout prints beside it.

The counting, stated plainly: across the full daily history of 7,781 symbols the rule fired about 14,000 times, and 20 sessions later the close was higher 53.5% of the time, against 48.4% for tall green bars generally. But ranked against the other days of that same symbol in that same year, the firing days landed mid-pack — what was good was the symbol and the year these appear in, not the date. The familiar claim that contraction is followed by expansion did not hold up here either. Use it to recognise a location, not to be promised a direction.