Invesco QQQ Trust [QQQ] Stock Forecast

Investors were overall net purchasers of fund assets for the sixth week in seven, adding a net of $22.4 billion. Money market funds, taxable-bond funds, and tax-exempt bond funds attracted new capital, while equity funds suffered outflows. U.S. broad-based equity indices reported positive returns, with the Russell 2000 experiencing its highest weekly return since May 20, 2020.

On Wall Street, short selling (borrowing shares to bet against a company) is one of the most challenging endeavors to master. First, from a long-term perspective, anyone shorting is hypothetically swimming upstream.

While it has been months since the latest regional bank failure, many advisors remain concerned. They fear that the issues that caused runs on Signature Bank and Silicon Valley Bank have not receded.

Dividend ETFs that exhibit lower volatility and provide potential protection during bear markets, currently have favorable valuation metrics, and offer the opportunity for compounding returns through reinvestment.

Here is a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq composite since their 2000 highs. We've updated this through the May 31, 2023 close.

The recent rallies in stocks have led to a substantial repricing in the Fed futures market, with the possibility of another rate hike at the next Fed meeting. Inflation data has shown signs of improvement, but the Fed will not be satisfied with a core CPI rate of 3% or 3.5% and will aim for a target range of 2% to 2.5%.

The historical spread between tech and small caps, a rebounding banking sector, and strong seasonal trends favor out performance in small-cap stocks over the next few weeks.

There's no denying that that generative artificial intelligence (AI) is captivating the technology sector and broader financial markets this year. Just look at semiconductor giant Nvidia (NASDAQ: NVDA), which is up 169.10% year-to-date — a staggering ascent for a company with market capitalization of nearly $950 billion.

Overall, ETFs pulled in $11.9 billion in capital last week, taking the year-to-date inflows to $150.3 billion.

The Invesco Nasdaq 100 ETF has outperformed the broader market in 2023, driven by the top 6 mega-cap companies. High valuations, narrowing breadth of the advance, and potential chart patterns suggest a short-term pullback is likely. I am using a long put strategy to capitalize on a potential pullback while limiting downside risk.