Is it time to sell QQQ?
πππToday is the day Nasdaq 100 will undergo a special rebalance which is meant to curb high concentration in the index of a handful of tech stocks. This may cause volatility in the markets. $Invesco QQQ Trust(QQQ)$
tracks the Nasdaq 100 has been on a strong upward trend recently. It is currently up 41% year to date. Can it go higher? I believe that in the short term it will be bearish. But it will recover in the mid term to long term.
To hedge my position, $Nasdaq100 Bear 3X ETF(SQQQ)$
is a good option as it provides - 3 times inverse exposure to QQQ. To do this, SQQQ uses swaps on the index itself and futures. However it is not advisable to hold SQQQ on a long term basis due to the effects of compounding on returns and time decay. It is best used on a daily basis. I prefer SQQQ than using Options as it is a much simpler alternative than Options. However the expense ratio is rather high at 0.95%.
SQQQ is currently up 1% at the last closing and 3% in the last 5 days and - 67% year todate. So QQQ is the clear winner to buy and hold long term but SQQQ is a good hedge to protect my position in QQQ.
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Looking at the Monthly time frame on QQQ, seems like we are looking to form a Cup and Handle, a bunch of earnings and news this week coming, but I believe on tech we can see a push down especially looking at $NQ Daily or Weekly time frame as well (Posting Weekly) .
QQQ uptrend continues to remain valid, despite last weeks close in red ;while its series of Higher Highs are now places of buyers interest due to price action retracements.
Trendline Resistance from ATH's seems 'impossible' from Fed's upcoming $USSIRY alone. Yet, that is still to be seen.