Would you like to earn 27% every 20 days?
This is the average value of Nic Chahine's option purchases. Don't sell covered calls or spreads…buy options. Most traders don't even have a 27% buy option win rate. His win rate is 83%. Here's how he does it.
The long decline we've seen in the market since April 12th has been led by high-profile tech stocks, which ironically led the bull market that began in 2023.
The rout of technology: The overall market momentum that recovered through 2023 carried over into the new year, with the upward trend continuing into March. In April, bets on interest rate cuts began to unravel as the downward trend in inflation stalled. Fed officials, who had threatened as many as three cuts to the federal funds rate after the March monetary policy meeting, are now singing a different tune.
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In response, bond yields began to rise sharply, with the 10-year yield rising to a high of 4.696% this week before falling slightly from that level.
All of these factors put downward pressure on tech stocks, which are classified as growth stocks. A high interest rate environment is believed to be detrimental to these stocks because it reduces long-term discounted cash flows and makes it difficult to secure low-cost debt financing.
The tech-heavy Nasdaq Composite Index was dragged down by six consecutive sessions of declines, returning to its lowest level since January 31st. The Nasdaq 100 index, made up of the largest non-financial tech stocks, ended at its lowest level since January 16th.
of Invesco QQQ Trust (NASDAQ:QQQ)The stock, which tracks the Nasdaq 100 index, settled 2.07% lower at $414.65 on Friday. This compared to a 0.87% decline in the Nasdaq 100 Index. SPDR S&P 500 ETF Trust (NYSE:SPY) is an exchange-traded fund that mirrors the broader S&P 500 index. This difference highlights how negative sentiment is primarily directed toward tech stocks.
Source: Benzinga Pro
See also: The best tech stocks right now
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high flyer Nvidia Inc. (NASDAQ:NVDA), which had been on a stratospheric rise due to AI leadership, crashed into the ground with a thud. The stock closed 10% lower at $762, giving it a weight of 6.22% of the Nasdaq 100 index. Microsoft Corporation (NASDAQ:MSFT) and Apple. (NASDAQ:AAPL) (NASDAQ:AAPL), the top stocks in the index by weight (8.83% and 7.58%, respectively), each fell just over 1.2%.
In an interview with CNBC, Creo Capital's managing director said: Sarah Kunst Said Now may not be the time to buy on the spur of the moment. “I think this is a scary time to buy,” he said, adding, “The reality is that thinking you can time the bottom when there is so much global uncertainty is a fool's errand.” I think so,” he added. ”
Premonition of similar bust in 2000? Doomsayers have begun to claim that a stock market crash similar to that of 2000 will occur, but the trigger is dot com bubble. These claims may be unfounded for fundamental and technical reasons.
In a memo published in late February, prominent technology analysts said: Daniel Ives He said the current AI craze and resulting technology rally is nothing like it was in 1999-2000.Between He said the technology industry was characterized by the dot-com bubble of 2000, high valuations, lack of monetization and infrastructure, weak balance sheets, frothy business models and a macro backdrop.
This time, beyond fundamentals, the macro environment and the occasional escalation of geopolitical tensions are playing a big role.
Technically, the QQQ chart shows that the current decline is not accompanied by a lot of volume, which makes the decline less convincing. On the contrary, during the dot-com bubble of 2000 and the selloff that coincided with the Fed's first interest rate hike in March 2022, volume was significantly higher than this period.
Overall, the coming weeks, when a number of high-profile tech companies are scheduled to report earnings, will likely provide clearer insight into the near-term direction of tech stocks.
of Technology Select Sector SPDR Fund (NYSE:XLK) closed Friday's trading down 2.06% at $192.53, according to data from Benzinga Pro.
Read next: Tesla's horror week ends with more price cuts, Rivian's second round of layoffs, Lucid touts longest-range domestic EV and more: This week's biggest EV stories
Photo: Shutterstock
Would you like to earn 27% every 20 days?
This is the average value of Nic Chahine's option purchases. Don't sell covered calls or spreads…buy options. Most traders don't even have a 27% buy option win rate. His win rate is 83%. Here's how he does it.
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