Taking a swing at scoring on defense in the NDX 100

Posted by Chris Kimble on 12/13/2010 at 1:06 pm; This entry is filed under Lack of Fear, Nasdaq 100, Scoring on defense.

Ted Williams, the great Red Soxx hitter is known for dividing the strike zone into 77 cells, each the size of a baseball.  He was a very "picky hitter!"  He only took a swing at a pitch he likes.  I have found it "pays to be picky" when it comes to patterns too!

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Game Plan....Buy PSQ with a 2% stop.  Am going to take a swing at scoring on defense due to the "lack of fear" that is present in the chart above. The trend is up in many markets so I will not give this trade much room to be wrong!  I like the pattern above, yet I am not predicting the same decline as took place at (1)!!!

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6 Comments

  1. Scott A. December 13th, 2010 at 2:26 pm

    Hi, Chris: what do you think about VXX at these levels? Last time you mentioned it, it was trading around $45/sh…

  2. bill December 13th, 2010 at 3:50 pm

    CK,

    I follow your blog for a long time.

    I am taking this short position, i can only trade through rydex fund which only allows for 2 times a day transaction. IS it possible to trade with your style in rydex funds.

    thanks
    Bill

  3. Chris Kimble December 13th, 2010 at 8:45 pm

    Bill… Sure you can use them, when they have a fund that corresponds with the suggestion.

  4. Tiho December 14th, 2010 at 9:30 am

    Great chart! Bullish sentiment on stocks as well as complacency is now at bit of a crazy level, where one should be careful about entering the long side. Report here.

  5. TA December 15th, 2010 at 10:31 pm

    Hello Chris, how about a chart similar to this on SPX/SPY? Is it exhibiting the same behavior? Perhaps even RUT/IWM.
    I believe a small correction is due and would like to see which one is a better “score on defense” :-)

    Thanks for all your great work!

  6. Chris Kimble December 15th, 2010 at 10:50 pm

    TA…. a similar chart of SPX and the VIX? The spread between the 500 and VIX is large. The 500 is little bit above the 4/2010 high, yet not close to the highs reached back in 2007. The NDX is testing the highs reached back in 2007, which should be a more important level to break of fail at.