Invesco NASDAQ 100 ETF (QQQM) dropped 4.6% on November 5, deepening a 5‑day loss of 7.7% as semiconductor stocks reeled from Qualcomm’s earnings miss and a broad rotation out of tech. The ETF now trades below its 40‑week average and the 200‑day SMA, with the daily trend running with the weekly downtrend. The balance of evidence leans negative for the next 2–6 weeks, and the prior bullish view has been invalidated.
Why it matters
The midterm election results initially sparked a broad rally, with the S&P 500 up 1.6% on November 4, but the enthusiasm faded quickly as chip stocks sold off. QQQM fell 4.6% on November 5, while the S&P 500 futures were flat and Nasdaq futures dropped 0.63% on chip weakness, according to Reuters. Over five days, QQQM is down 7.7% versus SPY’s 2.8% decline, a clear underperformance driven by the tech-heavy composition of the ETF.
The chip selloff is the core driver. Qualcomm missed fourth-quarter sales estimates, leading to a 10% drop, and the iShares Semiconductor ETF (SOXX) is down more than 23% over the past month, according to CNBC. The rotation out of tech is being driven by concerns about the sustainability of AI infrastructure spending, as noted in the same article. This is directly hitting QQQM, which holds a large weight in semiconductor and data center names.
The debate is whether this is a temporary pullback or a structural shift. On the bullish side, UBS traders see a “combustible setup” for a year-end rally, citing favorable seasonality and low hedge fund positioning, as reported by Bloomberg. On the bearish side, J.P. Morgan’s technical strategist warns the S&P 500 is hovering above a critical support level, with a break below 7,500 potentially triggering a drop to 7,237–7,313, according to Morningstar. The market is also digesting a rare valuation signal: the S&P 500’s forward P/E dropped 4.4 points to 18.8x, a decline that historically has preceded recessions in five of six instances since 1983, per Business Insider.
Valuation for QQQM itself is not directly available, but the ETF’s price relative to its moving averages tells the story. It is now below the 200-day SMA at $280.30, and the 50-day SMA at $297.51 is far above, indicating a sharp deterioration. The lack of analyst targets for the ETF is not unusual, but thetechnical picture is clear: the long-term trend has turned down.
What the evidence says
The long-term thesis is broken. The prior report on October 18, 2026, saw the price above its 40-week average and a bullish stance with low conviction. That view was invalidated when the price fell below the 40-week average, and now the ETF is in a corrective phase, down 13.1% from its October 6 peak of $312.76. The 40-week average is now overhead resistance, and the 200-day SMA at $280.30 is also above the current price.
For the next 2–6 weeks, the balance of evidence leans negative. The daily trend runs with the weekly downtrend, and the ETF is lagging the S&P 500 by 6.3% over 50 days. The RSI at 32.84 is oversold, but that has not halted the decline. The conviction is medium, with 2 of 4 points supporting the bearish case. The key downside level is a daily close below $258.57, which would confirm further weakness.
The strongest case against the bearish reading is the oversold condition and the steepness of the decline. A 7.7% drop in five days is sharp, and a bounce could occur. However, the price remains below all key moving averages, and the reward-to-risk for a downside breakout does not meet the 3-to-1 threshold. The math from $258.57 gives targets of $252.37 and $244.95, with a stop at $276.61, yielding reward-to-risk of 0.3 and 0.8. That is not compelling, but the trend is down, and the evidence leans negative.
Levels that matter
The structure holds below $275.0, a round number where sellers have consistently appeared on rallies. The weekly trend is down, and the 200-day SMA at $280.30 is the next resistance. The trend would end on a weekly close above $288.68, which is a swing zone that previously acted as support.
The breakout level to the downside is a daily close below $258.57. That would open the path to $252.37 and then $244.95. The stop for a short position would be at $276.61, based on the round level of $275.0 plus a quarter of ATR. The reward-to-risk is 0.3 on the first target and 0.8 on the second, which does not reach the 3-to-1 threshold. To improve the math, the price would need to fall below $258.57 with a stop above $276.61, but the current setup does not offer that.
What would change the picture
A weekly close above $288.68 would change the picture, as it would signal that buyers have regained control and the downtrend is broken. The non-price factor that could do the same is a sustained recovery in chip stocks, particularly if AI infrastructure spending concerns are alleviated. That would likely lift QQQM back above its 200-day average.
What to watch
- Upcoming Fed meetings and CPI releases, which could shift the macro backdrop.
- Earnings from major tech components like Apple, Microsoft, and Amazon, which could alter sentiment toward the sector.
- The broad-market level: a weekly close above $288.68 would change the picture, while a daily close below $258.57 would confirm further downside.
- Flows into QQQM: any large inflows or outflows could indicate institutional positioning, though none are reported.