Leveraged ETFs have continued to grow in popularity. Market and sector leveraged funds have been around for over a decade, but single stock leveraged ETFs are relatively new. Believe it or not, there are already four 2x long SpaceX (SPCX) ETFs! These leveraged funds have grown in popularity as retail investors have become increasingly active in markets. While we have written about leveraged funds in the past, more so about how their daily reset leverage impacts returns over time (click here for more), their growing size is becoming a market force on its own.

 As an example, the iShares Semiconductor ETF (SOXX) has north of $35 billion in AUM, a large fund in its own right. SOXX’s 3x levered counterpart, the Direxion Daily Semiconductors Bull 3x ETF (SOXL), has over $28 billion in AUM. Long story short, with $28 billion in AUM SOXL must attempt to replicate the exposure of almost $85 billion in SOXX each day. The daily rebalance for such a large amount of exposure leads to massive flows each day which act to reinforce the move in the underlying index. If SOXX is up, then SOXL must buy more in an increasing quantity with the opposite also being true. Digging a bit further, leveraged funds typically use swaps to replicate leveraged exposure, however, these swaps must be hedged by the counterparty (market maker) which means they need to buy if the underlying is going higher and sell if the underlying is heading lower. If you’ve heard the term “negative gamma” this is the dynamic people are referring to, market makers must match whichever way the market is moving. As these leveraged funds grow in absolute size, the move chasing market makers must do has a meaningful impact on volatility. While we’re only focusing on a leveraged long fund, the dynamic is the same for inverse leveraged funds as well.

While it’s not the case that leveraged funds are solely to blame for volatility in semiconductors, it is difficult to point to a single data point other than the growing rebalance flows. As an attempt to show that larger flows from leveraged ETFs are having an impact on volatility, particularly single day moves as these funds rebalance daily, we looked at the number of up or down 5% days for SOXX going back to 2010. So far in 2026 there have been nine +/-5% days for SOXX, which is on pace to break the record set in 2020 and 2022, two much more volatile years for the market. Even with the tariff tantrum and subsequent rally last year, 2026 has already tied the number of +/-5% days from 2025. There are a plethora of narratives surrounding market movement, but it’s clear that mechanical flows from growing leveraged ETFs are having a real impact on magnifying market movements. Even if you can’t use them for clients, understanding the impact leveraged funds can have on markets is becoming increasingly important.

The close to the first half of the year brings with it plenty of client conversations about how you are positioning their portfolios while your clients head off to the beach for their family vacations. The reported end to the war in Iran also serves as a logical reevaluation point of current market positioning and a prudent spot to “pick the weeds” within your overall market strategy. With that said, we will take today’s feature to update our Dow Technical Attribute Study, giving you ammo to talk about what has changed (and more importantly, what hasn’t) as you await the opening of Q3.

The Dow Jones Industrial Average has gone through many changes over the years, both in the constituents of the index itself and in its relevance as a main market benchmark. In terms of recent changes, both Amazon (AMZN) and NVIDIA (NVDA) were added to the .DJIA within the last few years. Despite these recent more tech focused additions, .DJIA has still struggled to keep up with other major benchmarks. Since 1/1/2023, .DJIA has underperformed SPX & NDX by ~41% and ~125% respectively. Remember, the Dow Jones is a price weighted index, meaning stocks with higher share prices have a greater influence on the index's value. This difference in weighting methodology means that names like GS & CAT have a larger impact on overall movement than the likes of NVDA or AAPL… for better or for worse. The overall technical picture remains quite strong for the Dow Jones as of 6/16, with the name sitting on a string of six consecutive buy signals on its default chart. The absolute picture is one thing…. The relative underperformance mentioned previously is important to avoid, especially if we want those client conversations to go well.

Regardless, there are fundamental analysts that rate all 30 Dow stocks as a "buy," "overweight," or "hold". While this subjective system is one of the limitations to using traditional fundamental research, it does provide advisors with an opportunity to differentiate themselves using a logical, organized, sell discipline based upon something grounded in supply and demand like our Technical Attribute ratings.

Higher equals better in this rating system. If a stock has all 5 of these attributes in its favor, it is considered a technically strong stock. On the other end of the spectrum, stocks with a technical attribute rating of 0 are considered the weakest of names. As a result, they tend to carry more risk and are often market laggards. This is not to say such stocks can't rise, but our odds of outperformance are much narrower with low attribute names (0, 1, and 2) versus high attribute names (3, 4, and 5). Our general rule of thumb is that a Technical Attribute rating of 3 or higher will increase the odds of success. From an implementation standpoint, using Technical Attributes to evaluate existing portfolios, especially those portfolios being transferred over to you, is one straightforward way to add value.

Reviewing the Stocks in the Dow by Technical Attributes

To put some numbers to this rating system, let's look at a Technical Attribute study using the components of the Dow Jones Industrial Average. We update this periodically in the Daily Equity Report, as it allows us to illustrate the benefit of implementing Technical Attributes into your business using a group of companies familiar to us all. We begin by separating the 30 components of the Dow into two categories: "weak attribute" stocks (0, 1, and 2) and "strong attribute" stocks (3, 4, and 5). The objective is two-fold. First, we want to show how each component has done versus the average stock, as represented by the S&P 500 Equal Weight Index (SPXEWI). Secondly, we hope to show that using the technical attribute system helps capture the important longer-term trends.

The results of the study convey several relevant pieces of information. For instance, not ALL weak attribute stocks underperform, and not ALL high attribute stocks outperform. We would consider this to be a positive, as every time we see a market process that boasts a 100% success rate, we inherently get skeptical. While the TA rating system may not work every time, it does work over time, highlighting stocks that are market leaders and avoiding stocks that are laggards.

This can be seen in the averages from the tables below. There are currently 16 stocks in the Dow with strong TA ratings (3 or higher) as of 6/17/2026, one less than the count when we started the year. The average length of time the Technical Attribute Rating has been "strong" for these 16 stocks is 509 days. The average outperformance for those 16 names versus the S&P Equal Weighted Index since becoming strong attribute names is over 55%, excluding dividends. Only four of these names have underperformed SPXEWI during their time in the high attribute territory, IBM, V, KO & AMZN. Note that all of these names moved back into “high attribute territory” over the last few months, and their overall underperformance has been relatively narrow. IBM has been the worst relative performer, lagging behind SPXEWI by just over 10%. The average outperformance for those names that have been high attributes for over a year (AXP, CAT, GS, TRV, JPM & WMT) is over 135%, highlighting the importance of holding onto established winers over time. More recent movers (since our last update in December) are highlighted in each table below, helping draw attention to those stocks that have gained/lost favor.

On the other hand, the remaining 14 stocks in the Dow are categorized as weak attribute names (2 or lower), and on average, these stocks have been technically weak for 352 days. Once a stock falls below the threshold of 3 positive attributes, this condition of lethargy can persist for an extended period. The average underperformance of these stocks since becoming weak attribute names is -7.90%, illustrating the importance of watching the Technical Attribute pictures for stocks that you own or manage over time. When observing just those names that have been low attributes for over 1 year (AMGN, HD, HON, VZ CRM, & SHW) that underperformance average doubles to just over 14.5%. Just like our positive attribute table, there are certainly instances where low attribute stocks can outperform the benchmark. If this outperformance persists, these stocks can (and have) become high RS names fit for investment.

This screening process can be both a crucial aspect of your portfolio management strategy and an important part of your story with clients and prospects. The "story," in this case, is not "being right all the time." Instead, it is adding a level of analysis to your process that is not afraid to say "sell" when a holding indicates that it has likely gone into hibernation… while more fundamental analysts will maintain their “buy” or “hold” rating far longer than it would be rational. While these ratings may miss a few modest periods of outperformance or underperformance, it is self-correcting by nature, helping you to stick with the important trends in the market.

Each week the analysts at NDW review and comment on all major asset classes in the global markets. Shown below is the summary or snapshot of the primary technical indicators we follow for multiple areas. Should there be changes mid-week we will certainly bring these to your attention via the report.

Remember, these are technical comments only. Just as you must be aware of fundamental data for the stocks we recommend based on technical criteria in the report, so too must you be aware of important data regarding delivery, market moving government releases, and other factors that may influence commodity pricing. We try to limit our technical comments to the most actively traded contracts in advance of delivery, but some contracts trade actively right up to delivery while others taper off well in advance. Be sure you check your dates before trading these contracts. For questions regarding this section or additional coverage of commodities email james.west@nasdaq.com.

Data represented in the table below is through 6/16/26:

Portfolio View - Commodity Indices

Cryptocurrency Update

Cryptocurrency Video (2:50)

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool, click here.

Call

Nucor Corporation (NUE) September 18 $250 Call

Put

Vistra Corp (VST) September 18 $165 Put

Income (Short Put)

Take-Two Interactive Software (TTWO) July 17 $250 Covered Call