⚠️CHART OF THE WEEK: Magnificent 7 stocks have been hammered so far this year

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Magnificent 7 stocks have dropped ~14% since their peak and are trading below their 200-day moving average for the 1st time in 2 years. The group has erased a whopping $2.6 TRILLION in market value over the last several weeks.

NVIDIA alone has shed ~$1 trillion market cap since its peak.

I do not like to take victory laps because it is important to stay humble in the markets as they constantly change. Along with their moves, our thesis needs to evolve accordingly. However, premium subscribers received a few warnings late last year and in the first few weeks of this year about the market conditions from the long-term investor perspective. Additionally, regarding the short-term view, this is what paid subscribers received on Sunday in the latest market recap:

"Is the US stock market heading for a correction?

A probability of at least a 10% decline in the S&P 500 over the next 3 months jumped to the highest level since the 2022 bear market, according to Goldman Sachs.

In the past, it has been a solid indicator in anticipating corrections, but usually after some sort of drawdown already started.

Along with other market technicals weakness, it suggests more downside might be coming.

In the first four days of the last week, the market was unusually fragile, indeed. On Wednesday, the S&P 500 was trading up ~1.2% after the open to eventually finish the day down 0.1%. Additionally, it has been an exception to have the S&P 500 dropping for 5 days straight over the last 2 years.

On the other hand, the market has entered deeply overbought levels, meaning we could see a short-term bounce first - it does not have to play like that, though.

Is the market pullback overdone or just starting?

Fear & Greed index, which NEITHER measures fear NOR greed, FELL to one of the lowest levels since the 2022 bear market.

This means market breadth is terrible while hedging picked up.

Far away from fear yet."

Moreover, 2 weeks ago premium subscribers received this analysis:

“How does the US stock market usually perform when retail investors are buying while institutional investors are selling at the same time?

Retail investors have been buying stocks (particularly technology) at a record pace over the last several weeks as it has been outlined a few times in the articles.

At the same time, institutional investors have been selling.

Hedge funds sold tech stocks last week at one of the fastest rates over the last 5 years.

In the past, such a development was a bad signal for the markets.

In such periods, the S&P 500 annualized return was 0%, against the average return of +10%.”

And here we are, the S&P 500 dropped further this week and is down 6% since its peak.

The next short-term to mid-term market analysis is coming up tomorrow (Sunday).

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