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Nasdaq 100 Price Outlook:
- The Nasdaq 100-tracking QQQ ETF recorded its largest single-day outflow since October on Friday
- The outflow preceded a broader pullback in risk assets that saw cryptos sink alongside stocks
- What is an ETF? All you Need to Know About Exchange Traded Funds
Nasdaq 100 ETF Sees Largest Outflow Since October - Stock Market Update
The S & P 500 , Nasdaq 100 and Dow Jones entered the week on the back foot as modest risk aversion swept across markets and saw stocks fall alongside cryptos and other speculative favorites. The shift in sentiment did not garner significant traction, however, as a slight uptick in US Treasury yields reflected little demand for safety amid declines in risk assets. That said, the Nasdaq 100-tracking QQQ ETF recorded its largest outflow since October on Friday as investors yanked $2.5 billion from the fund's coffers.
Nasdaq 100 Price Chart & QQQ ETF Flows
The outflow marked a rather significant departure from the recent trend which saw the 20-day fund flow moving average tick to its highest level since early November. That said, further withdrawals will be needed to develop a full reversal in fund flows and perhaps the broader Nasdaq 100.
As it stands, such a trend might be difficult to establish as weakness in the US Dollar and US Treasury market suggest a lack of the broader risk aversion that might be required to spark a serious downtrend in the Nasdaq 100. With the lackluster performance of traditional safe haven assets, in addition to the recent rally in tech stocks, it could be argued the outflow was emblematic of profit-taking maneuvers.
Dow Jones, Nasdaq 100, DAX 30 Technical Forecasts for the Week Ahead
Further still, the Nasdaq 100 trades mere points away from record levels so attempting to call a top at this stage may be rather presumptuous. Given the longer-term trend in both price action and fund flows, it would seem the Nasdaq 100 remains titled to the topside despite weakness to begin the week. As the Nasdaq looks to resume its journey higher, traders should keep an eye on upcoming earnings and potential regulatory concerns under the Biden administration. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.
--Written by Peter Hanks, Strategist for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX
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