Historic QQQ Signal Suggests More Gains Ahead

Subscribers to Chart of the Week received this commentary on Sunday, August 9.

Last August, Schaeffer’s Senior Quantitative Analyst Rocky White and I looked at the Invesco QQQ Trust (NASDAQ:QQQ) after the Nasdaq-100 Index (NDX) adjacent exchange traded fund (ETF) rattled off a six-day losing streak. Profit taking had overwhelmed Big Tech stocks, with the 23,000 level even getting briefly breached. Now, for the first time in roughly 12 months, the QQQ logged a sixth-straight daily drop on July 29. This triggered the signal once again, putting a bearish bow on July for a second consecutive monthly loss and breach of 28,000. History doesn’t repeat, but it often rhymes.

The study goes back to December 2012 and measures the average one-week, two-week, one-month, and three-month returns. From the most recent signal, QQQQ has already delivered a one-week return of 9.4%. In 2025 we noted that the best performances after the six-day signal had come in August 2015 and February 2016, when the ETF surged 16.4% and 11.4%, respectively, three months out. This time around, with another bullish return to log, the QQQ now averages a one-week gain of 2.5%, while the three-month return averages a roughly 8% gain.

Back in March, Senior V.P. of Research Todd Salamone noted the ETF was getting support from the ascending 200-day moving average, a chart pattern that historically yielded bullish returns. While this trendline wasn’t even in play during the July drawdown, the 50- and 100-day moving averages stepped up instead, the latter of which was breached once but then reclaimed on a retest. You’ll also see from the chart below the downtrend channel formed from a June 3 record high of $748.65, far past the now-conservative estimates of $610 we set earlier this year. This signal is already working its technical magic, with this channel getting toppled to start August.

Friday’s weaker-than-expected prognosis for July nonfarm payrolls showcased a drop of 23,000 jobs, versus the expected 83,000 gain. Alongside an unemployment rate that inched lower to 4.1%, investors’ rate-hike expectations for September took a breather. CME’s FedWatch tool now shows a 44% chance of a rate hike, down from the 60% chance it was flashing earlier this month.

This is welcome news for a tech sector that has had to wrangle with capex headwinds this earnings season, and could really use a lower interest rate environment to imbue growth stocks again. Despite a rough start to summer, QQQ is already testing its quarterly breakeven level and eyeing a second-consecutive weekly win. With another bullish data point in the books and a macro overhang potentially on ice, there’s a chance tech stocks can finish the year strong.