In the chart below, the pattern appears to be doing the same thing again, yet will it have a different outcome?
One day after the April highs I did a post asking if it is “Time to Fear the Techs?” (see post here) The reason then to fear the techs…”Resistance was at hand, with a very large spread between the NDX and the VXN.” This spread suggested a “lack of fear” was at hand, which often suggests prices are close to highs.
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Being a believer in the “Power of the Pattern” requires patience, to let patterns form and get close to completition. The Nasdaq 100 finds itself testing the highs it reached back in 2007 and the VXN index finds itself on a rising support line. If the past is a good indicator, aggressive investors should start to build a position right now by picking up some VXX, with a stop comfortable to their personal risk levels.
This suggestion should only be taken by aggressive investors because the trend remains up, price action in many areas remains a positive and Apple (AAPL) which represents roughly 25% of the NDX 100 index, shows NO SIGNS of trouble right now!
Billy,
Not a big fan of VXX for holding it very long and I agree with you that it acts poorly most of the time.
If the “LACK OF FEAR” is correct, VXX could pop a good 15% and still not be something that act correctly! Great move on your part per the inverse stock ETF’s you picked up!
Chris
Did someone say VXX? It reverse split today and was re-priced in the 40’s. Since it is down about 50% YTD, this ETF is losing its luster with me. It doesn’t “act” appropriately in my opinion.
We did make a short-term aggressive move last Fri (11/5) and bought QID, SH, and TZA based on overbought indicators. Tight stops though, since most long-term buy signals are still in place. Thanks for confirming the move!
Billy