TTM Squeeze

What it measures

The Squeeze identifies periods of unusually low volatility by checking whether the Bollinger Bands have contracted to sit entirely inside the Keltner Channel — a condition that historically precedes sharp, often violent breakouts. A companion momentum histogram estimates which direction the eventual breakout is more likely to favor.

How readings are interpreted

When Bollinger Bands sit inside the Keltner Channel, volatility has compressed and the market is coiling — the 'squeeze is on.' When the Bollinger Bands expand back outside the Keltner Channel, the squeeze has 'fired' and a directional move is typically underway. The momentum histogram's color/sign at the moment the squeeze fires gives a directional lean.

Conventional levels

• Squeeze ON (Bollinger inside Keltner): volatility compression, breakout building
• Squeeze OFF (Bollinger outside Keltner): compression has released, a directional move is likely underway
• Positive momentum histogram at squeeze-fire: bullish lean
• Negative momentum histogram at squeeze-fire: bearish lean
• The longer the squeeze persists before firing, the larger the eventual move tends to be

Where it works, and where it does not

This is specifically a volatility-compression tool, not a standalone directional indicator — it tells you that a big move is coming and gives a lean on direction, but not with certainty. Works on any timeframe; longer timeframes tend to produce more significant subsequent moves.

Commonly read alongside

• Bollinger Band Width: Directly related — both measure the same underlying compression, BBW just expresses it as a continuous number rather than a boolean
• Volume: A squeeze firing on a volume surge is a much higher-conviction breakout than on average volume
• ADX: Squeeze firing followed by rising ADX confirms a genuine new trend rather than a false breakout

Known limitations

• The direction lean from the momentum histogram is not guaranteed — false-direction fires do happen
• A squeeze can persist for a long time before firing, and simply watching for it says nothing about timing
• In already-volatile, trending assets the squeeze condition rarely triggers, limiting its usefulness there

In practice

• Build a watchlist of squeeze-on tickers and monitor them for the fire, rather than trying to predict when it happens
• Use the momentum histogram color as a directional lean, but an actual price breakout is the conventional confirmation
• Combine with volume — the highest-conviction setups are squeeze-fire plus a volume surge in the same direction
• Works well as a screener filter to narrow a large universe down to "stocks about to move"