The wave of retail investors fleeing for their lives is coming! Buyers rarely exited en masse, reaching a new high since the epidemic in March 2020
U.S. technology stocks fell sharply, and retail investors turned to large-scale selling, ending the bargain hunting mode.
Quick Look
- According to data from Vanda Research, when U.S. technology stocks plummeted on Thursday, retail investors sold a net US$338 million in individual stocks in a single day, setting a record since the COVID-19 epidemic and the largest single-day net outflow of funds since March 2020.
- The Dow Jones Industrial Average plummeted 1,800 points and the Nasdaq Composite Index entered correction territory.
- Retail buying almost completely disappeared, leaving only leveraged ETFs such as TQQQ and SOXL still buying.
AI-generated summary
Why It Matters
U.S. technology stocks suffered massive selling pressure on Thursday, with the Dow Jones Industrial Average plummeting 1,800 points, almost completely erasing its post-midterm election gains; the Nasdaq Composite Index entered correction territory. Vanda Research pointed out that retail investors usually buy at dips during general market selling pressure, but this time the buying almost completely disappeared.
When U.S. stocks faced massive selling pressure on technology stocks on Thursday (5th), the number of stocks sold by retail investors in a single day hit the highest record since the COVID-19 epidemic. Schematic diagram. (AFP)
According to data from market research firm Vanda Research, when U.S. stocks experienced massive selling pressure on technology stocks on Thursday (5th), the number of stocks sold by retail investors in a single day hit a record since the COVID-19 epidemic. As of less than an hour before the close of trading on Thursday, retail investors had sold a net US$338 million in individual stocks. For retail investors who have always been accustomed to buying at dips and keeping their funds in the market, this was the largest single-day net outflow of funds since March 2020.
"CNBC" reported that this wave of selling pressure from retail investors occurred at a time when U.S. stocks were experiencing a massive decline, and traders were withdrawing funds from technology stocks. The Dow Jones Industrial Average plummeted 1,800 points on Thursday, almost completely erasing its post-midterm election gains; the Nasdaq Composite Index entered correction territory.
Vanda Research said in a report: "During general market selling pressure, retail investors usually buy dips. But today this buying has almost completely disappeared on individual stocks."
The agency pointed out that the only remaining buying orders in the market are mainly concentrated in leveraged investment commodities, such as ProShares UltraPro QQQ (TQQQ), which provides three times the return performance of the Nasdaq 100 Index; and Direxion Daily Semiconductor Bull 3X Shares (SOXL), which tracks the rise and fall of semiconductor stocks and provides three times leveraged exposure.
The report pointed out that this wave of decline in U.S. stocks not only lacked bargain-hunting buying orders, but also caused investors to be forced to sell stocks, creating an imbalance between buying and selling pressure.
What to Watch
AI outlook — possibilities, not facts
If retail investors continue to sell on a net basis, U.S. stocks may face further downward pressure in the short term.
Possible · Within days
Open Questions
- What is the specific reason for the massive selling by retail investors?
- Will this wave of selling pressure continue, or is it a short-term phenomenon?
- What are the specific actions of institutional investors in this decline?
