eyeQ: the bulls look firmly in control in this sector
Experts at eyeQ have used AI and their own smart machine to analyse macro conditions and generate actionable trading signals. Here’s what it makes of this impressive turnaround.
25th June 2025 11:19
by Huw Roberts from eyeQ
“Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance.” eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
Invesco QQQ Trust
Macro Relevance: 82%
Model Value: $526.35
Fair Value Gap: +2.49% premium to model value
Data correct as at 25 June 2025. Please click glossary for explanation of terms. Long-term strategic model.
This Nasdaq exchange-traded fund (ETF) has just hit another all-time high.
Fears around a global trade war prompted a 23% fall back in April, so the speed of the turnaround is mighty impressive. In fact, that's the third-fastest recovery in US tech stocks since 1990 - only the 1998 correction and Covid sell-off unwound faster.
The charting perspective would be that this is a positive development. It implies the bears quickly capitulated, and that the bulls are firmly in control. Expect lots of talk about melt-ups to follow.
What's the macro perspective?
A macro relevance score of 82% means big-picture stuff such as growth, inflation and the Federal Reserve are important.
But for several months at the end of 2024 and start of 2025 macro wasn't a key driver. That helps explain why eyeQ model value tended to lag the spot price of Invesco QQQ Trust (NASDAQ:QQQ), the ETF that tracks the Nasdaq tech index.
The current macro regime has been in place since April and, in that time, macro conditions have been improving - model value has risen 7.1% since 1 April.
This latest acceleration higher has taken QQQ 2.5% above eyeQ model value. That's not a big valuation gap in the big scheme of things. It would need to effectively double before the elastic was stretched too thin and flashed a bearish signal.
So, for now, while these aren't the ideal entry levels from the macro viewpoint, there's little to argue against the charts and the picture from technical analysis.
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
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