The Nasdaq 100 is down 24% for the year, highlighting the bearishness abound in the technology sector right now. It’s what’s pushing the Direxion Daily Dow Jones Internet Bear 3X Shares (WEBS ) to a nearly 150% gain.
That weakness in tech is further augmented when looking at the Nasdaq CTA Internet Index, which is down about 40%. It’s been a free fall for a technology sector that was the toast of the town during the height of the pandemic when social distancing measures forced a heavier reliance on the internet to transact or keep in touch with friends and family.
A slow decline in such safety measures is causing pain for investors of tech names that provided a growth opportunity for the long-term horizon. All the volatility, however, makes for an ideal environment for traders looking to play the market fluctuations.
“Few would argue that right now is probably one of the more painful times to be a long-term investor,” a Motley Fool article explained. “This includes analysts themselves, who hold significant positions in many of the growth drivers of tomorrow and have felt the pain as many of these growth tech stocks have cratered.”
When the Bulls Return
WEBS seeks daily investment results equal to 300% of the inverse of the daily performance of the Dow Jones Internet Composite Index. The fund, under normal circumstances, invests in swap agreements, futures contracts, short positions, or other financial instruments that, in combination, provide inverse or short leveraged exposure to the index equal to at least 80% of the fund’s net assets.
What goes down must eventually come back up, but when is anybody’s guess. When it actually does happen, traders can take the other side with the Direxion Daily Technology Bull 3X ETF (TECL ).
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