The QQQ ETF is a big cap high tech ETF. The top 10 holdings which account for about 50% of the index is made up of the following big cap tech stocks. Apple and Microsoft account for 23.5%. The only non tech name in the list is PepsiCo (2.03%). Needless to say, it is heavily weighted toward the names that many investors and funds hold. Many people include it in their retirement accounts as well as they represent the best of the best in technology.

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QQQ ETF top 10 holdings

Looking the daily chart below, the index is down $2.95 or -1.02% at 1286.62 currently. That has the price testing the 50% midpoint of the move up from the post pandemic low reached on March 23, 2020 at 285.82.

The high price extended to 408.71 on November 23, 2021. Since then, the index has shed -29.79%. The low price last week dipped below the 50% but quickly rebounded. That low at 284.94 is the next target on a break of the 50% level.

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QQQ tests its 50% midpoint of the move from March 2020 low

Why is this important?

The QQQ ETF is a quick and dirty way to buy the major high tech big cap stocks, while not being a stock picker per say. That works great in a rising market. Buyers beget buyers and as the price steps higher and higher and higher, it forces the underlying stocks to also moved higher.

Conversely when there are sellers, sellers can beget sellers and force the underlying stocks to be dragged down as well.

Moving below the 50% retracement level with momentum, could accelerate the move lower in the top 10 names as well.

I guess it is not a great surprise, but a 30% haircut from the high will start to get investors attention when they check their retirement account balances. It could alter the tone in the market even more as traders realize even the safest of tech are not immune from the declines.

Conversely, if the buyers want to make a play in these high tech/big cap names, this is the low risk area to put a toe in the water or average more shares in....

Key level for buyers and sellers. Be aware.

/ NASDAQ