The top 10 stocks in the Nasdaq 100 (QQQ) make up 56% of the entire index. Apple (AAPL) makes up almost 20% – at least it did before the recent drop of over 20% from its high a couple of months ago.
With that, it is obvious that these mega-caps will drive the performance of the index and that is an important consideration when investing in futures or ETFs based on the underlying index.
Think about it for a second – a 3% move for Apple translates to a 0.60% move in the index. Just last Friday Apple was off by just about 4% intra-day and then finished higher by 0.4%. That accounts for nearly an 80 basis point move for the Naz 100!
Consider this when looking at the charts and the recent drop for the Naz 100. If Apple manages to gain some traction, this could be the index that has great potential through the end of the year.
(As of the Close Friday November 16th)