Nasdaq 100 (QQQ)

Think of it this way

It is the S&P 500 with the volume turned up. The same song, playing louder: it rises more when things go well and falls more when they go badly.

What is Nasdaq 100 (QQQ)?

Daily closing price of the ETF that tracks the Nasdaq 100, concentrated in large tech companies.

How to read Nasdaq 100 (QQQ)

It is overlaid on any macro chart. Rebased to 100 when several assets are turned on.

What Nasdaq 100 (QQQ) means for the market

Tech companies are growth companies: most of their value lies in profits far off in time. That makes them especially sensitive to the discount rate, that is, to the 10-year note. A rebound in long-term rates punishes them more than the S&P.

Where the money flows

From buyer to seller, just like the S&P: money changes hands and is not created. The particularity is that QQQ is not a stock but an exchange-traded fund, and there is one more step. When demand for shares exceeds supply, the issuer creates new shares and uses that money to buy the index's hundred stocks in their respective weights. Buying QQQ does not give those companies money —that would require a capital increase— but it does push up the price of their shares.

What to watch in Nasdaq 100 (QQQ)

Compare QQQ against the 10-year note on the same chart. The inverse relationship is usually very visible during stretches of rapidly rising rates.

A reference asset. The most sensitive to long-term rates.