Talk about a schizophrenic market! The Dow Jones Industrial Average was up by triple digits, while the Nasdaq was down by triple digits at one point yesterday.
The Nasdaq ended the day with an 87-point, or 1.2% loss. And it not only wiped out the double-digit open gain on your recently purchased PowerShares QQQ Trust QQQ171215C00155000) December 15, 2017, call options with a strike price of $155.00, but it pushed it into the red. Should we throw in the towel?
The answer is “No.” And here’s why …
I would be quite concerned if the rest of the stock market had suffered a similarly sized decline. But just about everything other than tech stocks did just fine.
- The SPDR S&P Retail ETF (XRT), for example, shot up 2.5% yesterday.
- The Dow Jones Transportation Index had its biggest one-day gain of 2017 and hit a new high.
- Financial Select Sector SPDR ETF was up 1.8%.
Investors weren’t fleeing the stock market. They were just rotating to different parts of the stock market, like kids pushing peas around their plate on Thanksgiving.
Plus, pre-market trading suggests a stock market rebound today. And that tells me that your best move is to hold on.
Your options last traded at $1.22. So we need a little help to get back into the green. However, we have until December 15. And that is plenty of time for the hot money to slosh back into tech stocks. Continue to hold.