QQQ and IVV ETFs: bull run returns as fear and greed jumps

on Jun 2, 2023
  • Invesco QQQ ETF has jumped by over 32% this year.
  • Joe Biden is set to pass a debt limit expansion bill on Friday.
  • The fear and greed index has jumped to the greed area.

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American stocks are doing great as one of the biggest risks in the economy has dissipated. The closely-watched tech-heavy Invesco QQQ ETF has jumped by 32% this year while the iShares Core S&P 500 (IVV) has jumped by 11.12% this year.

Return of the raging bull

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The QQQ and IVV ETFs have done well this year and there is a likelihood of more gains ahead. The US Senate vote for a bipartisan deal that expands the debt limit for two more years. This bill will then be signed on Friday, thus removing the biggest risk that has been in the market recently.

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There are several more catalysts that could push the two ETFs higher. First, there are signs that investors are getting greedy in the market. The closely watched fear and greed index has jumped to 61, signaling that investors are getting greedy. In most periods, American stocks tend to do well when investors are greedy.

Second, the VIX index has plunged to the lowest level since February. The VIX is an important gauge that looks at the positioning of one-month S&P 500 options. In most cases, US stocks tend to gain when the VIX is falling.

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Third, and most importantly, there are signs that the Fed will start pivoting soon. In a statement this week, the new Fed Vice Chair supported pausing rate hikes this month. He believes that a pause will help the bank to assess the impact of its recent rate hikes. A change in tune by the Fed will be a positive thing for the IVV and QQQ ETFs. 

Finally, there are signs that the regional banking crisis is ending as some of the most vulnerable banks like Western Alliance and PacWest have jumped sharply in the past few months.

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QQQ ETF stock has the momentum

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qqq etf
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QQQ ETF stock chart by TradingView

The other reason why the QQQ and IVV ETFs will continue rising is that they have a bullish momentum. As shown above, Invesco QQQ has been in a strong bullish trend in the past few months. This rally culminated in the stock jumping above the important resistance point at $332, the highest point on August 16.

The fund has moved above all moving averages while the Average Directional Index (ADX) has soared to 35. ADX is one a key indicator that looks at the strength of a trend. Therefore, there is a likelihood that the index will continue soaring, with the next level to watch being at $400. Because of their strong correlation, the IVV ETF will also continue rising as well.

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