Eric Balchunas Calls It a “Five Alarm Fire” Sell-Off. Here’s What Record ETF Trading Tells You
Two ETFs just shattered their own trading volume records in a single session, and one veteran analyst says the pattern is a fear signal Wall Street can't hide. Why do big traders reach for these funds first when panic hits,…
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Eric Balchunas posted after the close on November 5, 2026, that the Invesco QQQ Trust (NASDAQ:QQQ) set a trading volume record, with Balchunas putting the day’s total at about $80 billion. In the same post, he said the Direxion Daily Semiconductor Bull 3X ETF (NYSEARCA:SOXL) also hit a record of $25 billion. He then added a line about what that volume means. From his post on X:
“ETF volume is a fear gauge as big boy traders use them to tweak ports in crisis, and today was a five-alarm fire-type selloff. We were prob due tbh.”
Fear Gauges Flashed Red Together
The official fear gauge agreed. The CBOE Volatility Index closed at 28.18 on November 5, up from 16.61 the day before, a 69.7% one-day jump. That was the highest close of the past month and is just under the 30 level that usually marks high fear.
What These Two Funds Actually Own
QQQ seeks to track the Nasdaq-100 Index, which covers 100 of the largest domestic and international non-financial companies listed on Nasdaq. Balchunas wrote that the fund is “27 years old.” As of June 30, 2026, it held $490.1 billion in net assets. Its biggest positions were NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) at 7.6%, Apple (NASDAQ:AAPL) at 6.67%, and Micron Technology (NASDAQ:MU) at 5.64%. That means a large share of QQQ rides on chip stocks.
SOXL is a 3x leveraged daily long semiconductor fund. It aims to deliver three times the chip index’s daily move. NVIDIA and Micron are again among its biggest stock positions. The fund also reported $19.4 billion in net assets as of July 31, 2026, plus large derivative positions that provide the leverage.
Why Big Money Trades ETFs in a Panic
When a fund manager needs to cut tech exposure fast, selling 100 stocks one at a time is slow and expensive. One QQQ trade does it in seconds. Shorting QQQ also works as a quick hedge without touching the core holdings. That is why ETF volume spikes when stress hits. Traders favor SOXL because of its leverage: when stocks fall, leveraged holders sell to cut losses and get out.
Leverage Turned a Sharp Drop Into a Collapse
QQQ fell 7.99% over the week starting October 29 and 13.36% over the past month. Over the same periods, SOXL lost 55.8% and 72.45%. Bespoke posted on X that SOXL was “down 26% this morning and now down 84% from its peak.” On Friday, both rebounded: QQQ rose 1.72%, and SOXL gained 10.73% in midday trading.
What Retirement Savers Should Weigh Right Now
For investors at or near retirement, three points stand out.
- Longer-term returns remain positive. Even after the drop, QQQ is still up 7.14% year to date and 65.13% over five years.
- Check whether leveraged funds belong in the account at all. SOXL resets its leverage every day, so losses compound quickly in volatile markets. It is down 23.4% over five years.
- Review allocation against targets. Comparing a current stock allocation to its target shows how far a portfolio has drifted. Also look at how much semiconductor exposure you hold across all your funds, since QQQ already carries plenty.
A selloff in the first years of retirement does more damage than one later on, because withdrawals compound against a shrinking base. We walked through that math, and how to protect against it, in a free guide on the first five years of retirement.
Signals to Watch Next Week
Track whether QQQ and SOXL trading volume returns to normal and whether the VIX stays below 30. A second straight day of record ETF volume would suggest institutions are still repositioning. As Balchunas noted, “We were prob due.”
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
