This article was originally published on ETFTrends.com.
Monday's market session saw the Nasdaq Composite enter into correction territory, which made the technology sector a punching bag for bears. Investors fretted over prolonged trade wars with China and now Mexico entering the fracas.
"Markets continued to fall today as a result of potential tech regulation and rising trade tensions with China and Mexico," said firm WallachBeth Capital, a leading provider of institutional execution services, in an email. "Markets were spooked last week after President Trump announced tariffs on Mexican goods in response to illegal immigration. Mexico and China are the largest sources of US imports, but there is some cause for optimism as Mexico sent a delegation to the US to discuss immigration while China released a trade policy paper that, while critical of the US, did suggest willingness to return to talks."
“A plethora of tech related regulatory news today caused the sector to underperform significantly,” the firm added “Shares of Google fell over 6% after the Justice Department reportedly is set to launch a new antitrust probe.
This weakness in the tech sector paved the way for short traders while long traders took a heavy dose of jabs and hooks as evidenced in the list below:
In particular, three ETFs on that list that saw strong returns as investors fretted over trade wars:
ProShares UltraPro Short QQQ ETF (SQQQ) : seeks daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the NASDAQ-100 Index®. The fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the fund's investment objective. The index includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization.
Direxion Daily Technology Bear 3X ETF (TECS) : seeks daily investment results of 300 percent of the inverse 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. It is non-diversified.
ProShares UltraShort QQQ (QID) : seeks daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the NASDAQ-100 Index. The fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the fund's investment objective. The index includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization.
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