[ Jump to the 2022-05-13 update ]
Invesco QQQ ETF (QQQ) tracks the Nasdaq-100 Index. The index is composed of the 100 largest (based on market cap) non-financial companies listed on the Nasdaq.
The top 10 holdings in the Qs, as of this writing, are:
Apple (AAPL, 12.67%), Microsoft (MSFT, 10.42%), Amazon (AMZN, 5.92%), Tesla (TSLA, 4.10%), Alphabet (Class C, GOOG, 3.89%), Alphabet (Class A, GOOGL, 3.70%), Meta Platforms (FB, 3.60%), NVIDIA (NVDA, 3.10%), PepsiCo (2.13%), and Broadcom (AVGO, 2.11%)
QQQ started 2022 at $399.05 and this morning it traded as low as $285.05. That’s 28.57% of price decline.
The Qs ATH printed $408.71 in November of last year. From that top, the decline is even steeper: 30.26%.
That begs the question: Where is the bottom?
While we can’t predict tops nor bottoms, we can offer an interesting view using the best respected moving average support lines.
Take a look at this chart and support lines:
This is the weekly chart of the Invesco QQQ ETF (QQQ) from 2006.
Following the financial crisis of 2008 and starting in September 2009, the 169-week EMA supported the QQQ throughout many nosedives, including:
- 2010 flash crash and bear market
- August 2015 flash crash
- China’s economy turbulence Q1 2016
- Q4 2018 crash
- COVID-19 Q1 2020 crash
The 169-week EMA acted as a body support line for all these south visits.
Today it got another visit.
In order to stay intact and keep excelling at its job, it must show some muscles to the visiting Qs and make the QQQ end the week tomorrow at or above $289.84.
As there is still over a day in play, we’ll keep tracking and come back to update tomorrow after the market closes.
2022-05-13 Update
Market roared today and the Qs (QQQ) closed +3.71% at $301.94.
Impressive bounce.
That means that the 169-week EMA body support line wins to live another week.
And who knows, maybe another few more years?
But before we get ahead of ourselves and get a pat on the back for calling the bottom (huh??) we must acknowledge we are not out of the woods yet. The line held the weight of the falling QQQ in the current encounter like it has been doing since 2009, however, that does not mean the Qs won’t retaliate and come back for the break next week or in two weeks. We should wait a bit and judge in retrospect.
Here’s the updated chart now that the week is in the books:
Zooming in:
