TQQQ TQQQ 0.00%↑ is a highly traded ETF that tracks the Nasdaq 100 index. This ETF is regularly in the top 5 of the most actively traded stocks with hundreds of millions of trades per day. INSANE!

When using technical analysis to evaluate entry and exit prices, it helps to scale out and see historical performances. Let’s compare year-to-date vs last 5 days for TQQQ.

Note: Reviewing historical performances for ETFs are more helpful than reviewing historical performances of equity stocks because ETFs are baskets of equity stocks, for instance. Therefore ETFs will be more influenced by macro economic factors which are more predictable than individual company factors.

TQQQ YTD

Below is YTD for TQQQ showing daily candlesticks, meaning each bar represents a day.
Green bar = Finished positive for the day
Red bar = Finished negative for the day
Size of the bar indicates the daily high and low.

TQQQ Last 5 days

One way (emphasis on one) to analyze the comparison of the two charts is to compare where in the YTD chart does the Last 5 days occur. While not an exact science, the area of the YTD chart that looks closet to the 5-day chart seems to be here:

Create a spread trade

One probability of the future direction of TQQQ based off comparing Chart 1 and 2 is that TQQQ may trend downwards. Perhaps, not at the same degree. The degree could be more severe or less severe than the historical performance. How I would approach a short-term trade:

1. Determine what my target rate of return and timeframe are. Perhaps in this case 7%-8% return over 21 days.

2. Create a spread by buying 100 shares of TQQQ and 100 shares of its inverse, SQQQ SQQQ 0.00%↑. As the direction moves positive, this generates profit for TQQQ and a loss for SQQQ. As my target rate of return accumulates, then sell TQQQ and hold SQQQ. When market reverses, this will benefit SQQQ. As I achieve my target rate of return, then sell SQQQ.

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