If volatility is your cup of tea, then you’ll enjoy the Nasdaq 100. The big tech index shaved $1 trillion from its value in recent market sessions, giving traders an opportunity for bearish plays.
That said, it’s been nothing short of a roller coaster ride for Nasdaq 100 investors. According to a Yahoo Finance! article, the “tech-heavy benchmark now has seen more than $1 trillion evaporate from peak to trough every month this year, as tighter monetary policy and surging bond yields ignite concern among investors that the economy is headed for a recession.”
Big tech is falling victim to the normal market pangs everyone is experiencing these days, including inflation. All eyes will be on the U.S. Federal Reserve and how hawkish it will get with interest rates as more economic data reveals how hot the economy is running.
Overall, the Nasdaq 100 is down 14% on the year. Around mid-March, it looked like it could turn things around before inflation fears stifled its comeback rally.
“It’s too early to turn positive on U.S. tech stocks,” said Edmund Shing, BNP Paribas Wealth’s chief investment officer. “There’s more downside likely very short term.”
Going Short on Big Tech
Given the weakness this year, traders looking for inverse plays in the big tech sector can opt for triple leverage opportunities from Direxion Investments. One such opportunity is the Direxion Daily Technology Bear 3X ETF (TECS), which is up over 30% this year.
TECS seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the daily performance of the Technology Select Sector Index. The index is provided by S&P Dow Jones Indices and includes domestic companies from the technology sector.
