Last week in exchange traded funds was largely marked with sleepy early morning and afternoon sessions in terms of trading volume, followed by large buy programs going into the closing bell over 30 or 45 minute time frames, where literally most of the daily volume traded in the last part of the day.
Friday was no exception, as major index products such as PowerShares QQQ (NasdaqGM: QQQ) and SPDR S&P 500 (NYSEArca: SPY) vaulted higher into the close (and continued to trade higher after 4:00 PM EST in the aftermarket), largely on options related buy program activities.
We note that there was considerable option interest in SPX (S&P 500) index options at the 1200 strike as well as NDX (Nasdaq 100 Index) index options at the 2300 strike, and both indexes ultimately closed above these levels, which are both the highest levels since early August.
While the SPX and related S&P 500 ETFs such as iShares S&P 500 (NYSEArca: IVV) and SPY remain below 50 and 200 day moving averages, the NDX and QQQ notably broke out this week on 5 consecutive up days, bullishly crossing above both the 50 and 200 day moving averages and closing above both for the week. [Chart of the Day: QQQ]
It would be fair to say that technology is largely leading the market higher based on this latest run, but the question is, is that relative sector strength enough to pull the other weaker sectors (such as financials) into a confirmed longer term rally. [Financial ETFs Lag]
Discounting slower volumes on Monday and Tuesday of the week, volumes were above average on the whole towards the end of the week. As should be expected, as the NDX and QQQ made a unilateral move this week largely on strength in Apple (NasdaqGS: AAPL) and other tech equity names, related bullish leveraged products including ProShares UltraPro QQQ (NasdaqGM: TQQQ), ProShares Ultra QQQ (NYSEArca: QLD) and Direxion Daily Technology Bull 3x Shares (NYSEArca: TYH) traded healthy volumes as well.
From an asset flows standpoint, we again saw considerable creation activity in PowerShares US Dollar Index Bullish (NYSEArca: UUP), with nearly $400 million flowing into the fund. Last week we pointed out steady creation activity and call buying in UUP as the U.S. dollar made a major bullish move to the upside. [Dollar, ETF Trading Volume Rise]