Lin Reg Channel
Trenddraws on the price
The least-squares line through the last 100 closes, banded at two standard deviations. The trend as a statistician would draw it.
On this chart: Last 100 bars, ±2 standard deviations of the residuals.
What it measures
A linear regression channel fits the straight line that minimizes squared distance to the last 100 closes, then draws parallels two standard deviations of the residuals above and below. Unlike a hand-drawn trendline it has no anchor-point discretion — same data, same channel, every time.
The window is deliberately trailing: a year-old trend has no claim on where this quarter's channel sits.
How to read it
The centerline's slope is the trend's arithmetic; the channel edges mark statistically stretched territory within it. About 95% of closes land inside ±2 standard deviations while the trend holds — an escape from the channel is either the statistical tail or the trend changing.
Using it on the wheel
The lower band quantifies "stretched below trend" — the zone where put premium on a still-trending name is elevated by a pullback that remains, statistically, ordinary. A strike below the lower band sits beyond even that stretch. Both are reference distances, recalculated as the window rolls.
Like everything in this guide, these are descriptions of conditions and reference levels — context for your own decisions, not instructions to trade.