The Nasdaq-100 has seen significant profit taking as many investors have trimmed their exposure to the Mag 7. I believe there is more unwinding for the Nasdaq-100, which is tracked by the Invesco QQQ Trust ETF , as we continue to digest all of the "Magnificent Seven" earnings reports. Volatility and carnage in the Nasdaq should persist causing more sellers to sell tech stocks.
Here is an options strategy to profit on this additional plunge in Tech. After printing several recent month lows in several Mag 7 names — Nvidia , Meta Platforms and Alphabet — the tech heavy Nasdaq got off the proverbial mat and attempted a comeback Thursday. However, the move ran out of gas into the closing bell, and the QQQ finished back in the red.
The rotation persisted, as the Russell 2000 and the Dow Industrials both edged higher. The Nasdaq's failed rebound comes after investors endured its worst day in nearly eighteen months on Wednesday. The QQQ's closed down over 3.
5%, while the S & P 500 index closed down over 2 for the first time in almost 400 days. The sell-off was kicked off by Alphabet shaving 5% (post its Q2 earnings report) and then losses accelerated by Tesla, whose shares fell 12.3% for its worst day since 2020.
While earnings may or may not make sense this quarter, it has become apparent that those who have been riding the AI wave higher are itching to take some chips off the table, and rightfully so. Nvidia is still up 130% year to date. How much further can we drop, you ask? .