US equity index futures modestly green; Dow up ~0.3%
Euro STOXX 600 index up ~0.7%
Dollar, bitcoin dip; gold edges up; US crude rises >2%
US 10-Year Treasury yield edges down to ~4.21%
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LEVERAGED ETF FLOWS SIGNAL TUG-OF-WAR BETWEEN NASDAQ BULLS AND BEARS
At Friday's close, the Invesco QQQ Trust QQQ.O, a popular ETF that tracks the Nasdaq 100 Index .NDX, ended down around 6.6% from its October 29, 2025, record closing high. Amid the recent instability, traders are monitoring the tug-of-war between bulls and bears in order to better assess the state of market sentiment.
One means of measuring sentiment is to take a look at the ratio of raw money flow into leveraged equity ETFs to see if one side or the other may have gotten a bit too cocky. If so, from a contrarian perspective, the market may be ripe for a reversal.
The ProShares UltraPro Short QQQ ETF SQQQ.O seeks daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the Nasdaq 100 Index, while the ProShares UltraPro QQQ ETF TQQQ.O seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the Nasdaq 100 Index.
Surprisingly, the raw money flow into the SQQQ relative to the TQQQ put in a recent peak at 0.99 on February 18, which was well before the U.S.-Israeli attack on Iran on February 28. On Monday, March 2, the first day stocks could react to the war, this ratio hit 0.92.
It has since been volatile. After declining to a low of 0.65 on March 6, it ended Monday at 0.92 again. Meanwhile, Nasdaq 100 bulls are heartened by the QQQ's resilience; the ETF has yet to take out its November lows.
Thus, it remains to be seen from a contrarian perspective if peak uncertainty/fear has been seen, and this ratio will settle back down into a sub-0.50 basing pattern amid a renewed Nasdaq advance.
A thrust above the 1.06 April 8, 2025, high, which marked the end of the Nasdaq 100's December 2024 to April 2025 bear market, could suggest potential for much greater Nasdaq 100 instability.
The ratio did reach much higher levels throughout the 2022 bear market given that the Nasdaq 100's decline was not short; instead, it proved to be protracted and especially deep.
(Terence Gabriel)
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EARLIER ON LIVE MARKETS:
IRAN WAR A MANAGEABLE SHOCK, SAY SOCIETE GENERALE CLICK HERE
WAR DENTS INVESTOR SENTIMENT TOWARDS EUROPEAN STOCKS- BOFA SURVEY CLICK HERE
EUROPEAN STOCKS PRETTY CALM CLICK HERE
EUROPE BEFORE THE BELL: OIL UP, SHARES DOWN CLICK HERE
MORNING BID: CENTRAL BANKS GIRD FOR OIL SHOCKS AS RBA VOTES 5-4 TO HIKE CLICK HERE
SQQQTQQQRatio03172026 https://fingfx.thomsonreuters.com/gfx/buzz/gdpzawlxevw/SQQQvSTQQQRMF03172026.png
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)