One ratio. Every cycle.
NQV — Nasdaq Quotient Velocity — reads the market through a single instrument, the TQQQ/QQQ price ratio, distilled into one proprietary momentum line. It is one way to observe the relative strength between leveraged exposure and the index, from the monthly chart down to the 4-hour view.
Why the TQQQ / QQQ ratio
Two funds on the same index. Their ratio is a built-in lie detector.
QQQ
the benchmarkQQQ (Invesco QQQ Trust) tracks the Nasdaq 100 — the 100 largest non-financial companies on the Nasdaq: Apple, Microsoft, NVIDIA, Amazon and the rest of big tech. Highly liquid, listed since 1999, it's the cleanest mirror of where growth capital is flowing. In NQV, QQQ is the market itself.
TQQQ
leveraged moneyTQQQ (ProShares UltraPro QQQ) is a 3x leveraged QQQ, rebalanced daily. That daily rebalancing creates two behaviors:
- In a trend — daily compounding works for it; TQQQ's cumulative gain exceeds 3× QQQ。
- In chop — volatility decay grinds it down; even when QQQ goes sideways, TQQQ slowly bleeds.
TQQQ is the most aggressive, most honest money in the market.
Both funds track the same index, so dividing one by the other cancels everything specific to a stock or sector. What's left is pure signal: the ratio moves only as market momentum strengthens or weakens — the noise of differing underlyings is stripped away. That's what makes it a clean gauge. Ratio rising — leveraged money is beating the index; the trend has real momentum behind it. Ratio falling — leveraged money is lagging; momentum is fading even if the index is still climbing.
A rally the ratio refuses to confirm is powered by sentiment, not momentum. A decline where the ratio stabilizes before price often marks a bottom forming. The instrument is set: every NQV calculation is built on the TQQQ/QQQ closing-price ratio.
One reading, not two indicators
NQV fuses regime and rotation into a single momentum line.
NQV distills the ratio into one line. A slow component defines the regime — is momentum positive or negative? A fast component times the turns inside that regime, flagging when momentum is overextended or diverging from price. A channel length of 50 gauges how far the ratio has stretched from its baseline; an average length of 100 smooths the swing. The two are combined into a single reading — the line you watch, with local tops marked in red and bottoms in green.
NQV
the reading- Instrument
- TQQQ / QQQ
- Channel length
- 50
- Average length
- 100
- Output
- one line
- Markers
- pivot high / low
Built on MACD and a few other momentum indicators, tuned and combined into the proprietary NQV line.
Positive
The reading sits above zero, or is recovering from a low; leveraged exposure is outperforming the index — historically a risk-on characteristic.
Undefined
The reading hovers near zero, flattens or alternates sign — most often a transition between two states. The regime has not formed.
Negative
The reading sits below zero, or is falling from a high; leveraged exposure is decaying faster than the index — historically a risk-off characteristic.
Large frames rule. Small frames warn.
No single timeframe is the system. The large frames set direction and the small ones follow — but the small frames' persistent, one-way shifts feed back up the ladder and are what eventually turn the large cycle. Direction flows down; reversals are born flowing up.
The larger timeframe sets direction; smaller ones follow. When weekly and daily readings are both positive, a negative reading on a shorter timeframe has historically corresponded to a pullback within the trend rather than a reversal of state. Until the larger timeframe turns, the prevailing regime remains defined by it.
But the small frames aren't only followers. A sustained, one-way lean in the small frames feeds back up the ladder and is what eventually reverses the large cycle. A single small-frame reading is noise; a persistent one is the early edge of a turn:
- 45-Min diverges first — price makes a new high, NQV refuses to confirm.
- The divergence isn't absorbed — 30-Min Finally the 3-Hour turn.
- Small frames keep leaning the same way; the accumulated force erodes the layers above.
- TheDailyline rolls over, toward the zero level.
- Finally the 3-Day / Weekly flip — the regime officially changes hands.
The full ladder — heaviest to lightest
Read the line, not the price
Price only tells you what already happened. Read NQV itself, in three passes — position, shape, structure.
First, before price: where is NQV versus its own history — high or low? And which side of zero — above (bullish regime) or below (bearish)? Level and sign come before everything else.
Is the line rising, rolling over, or just hovering? A flat, choppy stretch — the market hesitating, undecided — is not a signal. It's a wait: momentum is neither building nor breaking.
The turns that matter are double and triple bottoms — and tops. A second or third test where the line stops falling and turns up, even as price makes a new low, is where reversals are born. The first test is only a warning.
Three Reading States
Positive
- The reading sits above zero, or is recovering from a low.
- The slope steepens as it rises — the ratio's distance from its baseline is widening.
Leveraged exposure is outperforming the index — historically a risk-on characteristic.
Negative
- The reading sits below zero, or is falling from a high.
- Or a divergence appears — price makes a new high while the reading forms a lower one.
Leveraged exposure is decaying faster than the index — historically a risk-off characteristic.
Undefined
- The reading hovers near zero, flattens, or alternates sign.
- Most often a transition between two states.
The regime has not formed under these conditions. Historically, such intervals have varied widely in duration.
Three quality checks
Steepening = momentum accelerating. Flattening = momentum exhausting — caution begins before the turn.
Weekly and daily aligned = highest confidence. When they conflict, defer to the large cycle and treat the small one as a warning.
Any new price high or low that NQV does not confirm should be discounted.
NQV is momentum-based and therefore lagging — by the time the reading turns, price has usually moved first. It does not describe tops or bottoms, only the middle of a state; the turning zones at either end are where a measure of this kind has the least resolution. The tool was constructed on Nasdaq data from 2013 onward, spanning volatility environments including the 2018 correction, the 2020 decline and the 2022 downtrend. Behaviour varies considerably across market conditions, and the range of data covered implies nothing about future readings.
The VESTFY lines, live
Not a screenshot — the actual indicator, computed in your browser from live TQQQ/QQQ prices, on the 4-hour, daily or weekly view. Three lines trace the same question at different speeds: CIthe Combined Indicator — a proprietary composite momentum line; MAits Moving Average; and SDthe Smoothed Difference between them — a reference line that oscillates around zero as market conditions shift.
Going deeper on NQV
One page can describe what the indicator measures; it takes more than that to show how a regime reading holds up across cycles, and where it misleads. These pieces stay on this page rather than scattering through Insights, so the framing above travels with them.
Everything on this page is for educational purposes only. NQV is an analytical framework for studying market cycles — not a trading system VESTFY operates, and not a signal service; VESTFY does not issue trading signals or manage money, and nothing here is investment advice or a recommendation to buy or sell any security. Every reading is a probability judgment that can be wrong. Backtested performance does not guarantee future results. Always do your own research and consult a licensed professional before investing.