As investors buy the dip, American stocks have staged a strong comeback during this earnings season. Dow Jones has added over 1,000 points in the past few days. Similarly, the small-cap Russell 2,000 has risen by 10% from its YTD low. The QQQ stock price has recovered by about 10%, while the fear and greed index has risen to 36.
Difficult earnings season
The fear and greed index has rebounded as investors refocus on the most difficult earnings season since 2020. Large banks like JP Morgan, Wells Fargo, and Morgan Stanley published extremely weak results as investment banking revenue retreated. Similarly, companies like Johnson & Johnson, IBM, and Lockheed Martin warned about the impact of high inflation and a strong US dollar on their businesses,
Meanwhile, Netflix said it continued losing more users as demand for its platform waned. The firm lost over 970k users in the second quarter of this year after it lost 2 million in Q1. Nonetheless, the company issued a relatively optimistic outlook for the business. It expects to add more revenue as it cracks down on password sharing and introduces a cheaper ad-supported tier.
The next key catalyst for the QQQ stock price and the fear and greed index will be earnings by Tesla that will come out on Wednesday. Other firms that will publish are Biogen, Abbott Labs, Northern Trust, and Baker Hughes.
The fear and greed has risen slightly, helped by the performance of the stock price strength sub-index, which has moved to an extreme greed level. The VIX index has moved to the neutral point while safe-haven demand and put and call options are in the fear zone.
QQQ stock price forecast
The four-hour chart shows that the Invesco QQQ share price has made a strong recovery in the past few days; the stock has managed to move above the important resistance at $296, where it struggled to move above earlier this month.
The 25-day and 50-day moving averages have made a bullish crossover pattern. It is also slightly below the 23.6% Fibonacci Retracement level. Therefore, the QQQ ETF will likely keep rising as bulls target the 38.2% retracement level at $320. This view will be invalidated if it manages to move below $280.
