ProShares UltraPro QQQ [TQQQ] Stock Forecast

The ProShares UltraPro QQQ (TQQQ) ETF has done well this year as American stocks jumped. The highly leveraged fund soared to a high of $46 in November, bringing the year-to-date gains to over 80%.

Equity markets traded slightly up, while short-term Treasury yields increased by more than 2.0%. After logging a record-breaking weekly inflow last week, high-yield ETFs posted their second-largest weekly inflow. Short/intermediate investment grade funds have seen 10 straight weekly outflows while recording three consecutive weekly gains.

Consider selling/shorting the ProShares UltraPro QQQ ETF as a trading vehicle for overextended Big Tech names. My bearish view on Big Tech is based on high valuations in a slowing economic growth, elevated interest rate environment. The business earnings yield on investment to short-term Treasury rate spread suggests similarities to previous market peaks and recessions.

The ProShares UltraPro QQQ ETF has achieved impressive returns over the past 15 years, but investors may be overlooking potential risks. Historical data shows that leveraged ETFs can experience significant losses during market downturns, and negative returns can accumulate over time. Indicators suggest that a bubble may be forming in the Nasdaq-100 and that a recession could be on the horizon, making investing in TQQQ too risky.

High trading volume indicates high liquidity, which is a key characteristic of ETFs.

Last August, TQQQ was recommended for a short-term trade based on bearish sentiment, but investors should now take a profit on half of their position. The equity "puts to calls" ratio is higher now than a month ago and at the level that occurred at the COVID bear market low. This is very bullish. The Hulbert Survey of NASDAQ Newsletter Writers shows a shift back toward bullish sentiment but not yet at a level to reverse the previous buy signal.

The ProShares UltraPro QQQ ETF is a leveraged fund that aims to provide three times the daily performance of the Nasdaq-100 Index. TQQQ should be approached cautiously due to its strategy, relatively high expense ratio for an ETF, and potential for large swings. Headwinds include recent CPI figures, lofty valuations, and a US consumer under pressure from higher borrowing costs.

September is historically volatile for stocks, but October-December are more favorable for risk-taking. Currently, mega-cap tech stocks are outperforming smaller-cap stocks, while defensive sectors and credit spreads are not showing signs of stress. Consider investing in mega-cap, liquid technology stocks, such as the TQQQ ETF, which is holding up well in the volatile environment.

This article is looking at the possibility of coupling together short positions in both TQQQ and SQQQ in a pairs trade. Leveraged ETFs experience NAV erosion and are not advisable as long-term investments. This TQQQ SQQQ pairs trade has a recent annual decay rate of 21.175% and expected returns of around 18%.

The CBOE "puts to calls" ratio and the Hulbert survey of NASDAQ newsletter writers point to the end of the correction and at least a four-week rally. The market index to use will be the QQQ, or better, a leveraged variant of it such as the Proshares 3x QQQ symbol - TQQQ. TQQQ was designed specifically for short-term rallies of a few days to a few weeks, which is what we believe the indicators point to.

ProShares UltraPro QQQ is a US stock and trading under the symbol TQQQ

ProShares UltraPro QQQ stock price is $45.935 today.

Yes, ProShares UltraPro QQQ is a publicly traded company.