The Nasdaq-100 Fell Below Its 50-Day Average: What Happened Next? 23 Years of Data (October 2026)

Tech stocks sold off this week as big-tech earnings stirred up worries about AI spending. On October 29, 2026, the Nasdaq-100 fund (QQQ) fell 1.4% and closed at $715.34, back below its 50-day average ($725.10). It is still 5.5% above its 200-day average and up 16.8% this year, but 6.2% below its record high of $762.86.

A close below the 50-day average is one of the most watched warning signs on a chart. Is it a reason to step aside, or just a normal dip in an uptrend? We found every time since 2001 that QQQ closed below its 50-day average while it was still above its 200-day, and measured what it did over the next one, three and six months.

The short version

• Over 23 years, a dip below the 50-day in an uptrend was not a sell signal. QQQ averaged 4.8% over the next three months (50 cases, 80% up), against 3.6% at any time it was above its 200-day (73% up).
• The pattern held in both halves of the test: 3.9% against 0.3% from 2001 to 2009, and 5.5% against 4.7% since 2010.
• The edge is small and rests on a few big rebounds. Without the five best cases, the three-month average fell to 3.3%, just below the 3.6% for any time.
• The 200-day mattered. When QQQ broke its 50-day while it was already below its 200-day, it averaged −2.3% over three months (18 cases).
• Selling every time QQQ closed below its 50-day cut the worst drawdown from 67% to 22%, but cut the annual return from 11.1% to 7.2%.

Where the Nasdaq-100 stands today

As of the October 29 close, the selloff was narrow but deep in a few big names:

Fewer than half the members fell, yet QQQ lost 1.4%, because some of the largest names dropped hard. Names that fell more than 2% include Alphabet (GOOGL, −12.6%), Amazon (AMZN, −4.3%), Micron (MU, −5.0%), Marvell (MRVL, −13.2%) and Fortinet (FTNT, −20.1%). QQQ first slipped below its 50-day on October 16, climbed back above it on October 28, and fell below it again a day later.

What happened after past dips below the 50-day

Average return of QQQ after a close below its 50-day average while it was above its 200-day, compared with any period of the same length when QQQ was above its 200-day:

January 2001 to October 29, 2026. Returns are price changes on dividend-adjusted prices, bought and sold at the close, with no costs. A new trade could start only after the last one ended, so the periods don’t overlap. The trade still open on October 29 is not counted. QQQ was below its 200-day from 2001 to mid-2003, so the first signal came in August 2003; the last column starts there for a fair comparison. One-month baselines come from the backtester’s summary.

Over every holding period, QQQ did a little better after a dip below its 50-day than at a typical time in an uptrend. The three-month median was 5.1% after a dip, against 4.2% for any time above the 200-day. Over six months the average was higher, but the share of gains was a bit lower (77% against 82%).

Is one period driving it?

The dip did better in both periods, so no single decade drives the result. But the edge is thin. The five best three-month rebounds (+20.9% after February 2026, +19.4% after July 2009, +18.4% after August 2003 and December 2011, +15.5% after June 2021) make up most of it. Without them, a dip was followed by an ordinary quarter.

Dips also failed. The worst three months came after November 2007 (−14.7%), October 2018 (−11.2%), May 2006 (−10.4%), January 2025 (−10.3%) and December 2021 (−8.8%). The dip of February 2020 ended with a 6.6% gain three months later, but only after a crash in between.

Other checks:

• Below the 200-day: when QQQ broke its 50-day while it was already below its 200-day, it averaged −2.3% over three months (18 cases, 56% up), and −5.3% from 2001 to 2009 (11 cases).
• The wider market: SPY averaged 3.9% over three months after QQQ broke its 50-day in an uptrend (50 cases, 78% up), against 2.8% at any time QQQ was above its 200-day.

Should you sell below the 50-day?

We also tested a simple trend rule: hold QQQ while it closes above its 50-day average, and sell when it closes below.

Dividends included in the fund prices. Annual returns compounded from the year-by-year results. Time out of the market earns nothing.

The 50-day rule did its job in bear markets: it lost 1.5% in 2008 and 10.2% in 2022, when QQQ lost 39.6% and 32.4%. But it traded 214 times, only 29% of trades made money, and the many false exits cost almost four points a year. Holding only above the 200-day gave up less return with a little more risk.

What this means

• A dip below the 50-day in an uptrend was not a reliable warning. Over 23 years, QQQ did slightly better afterwards than at a typical time, and rose in 80% of the three-month periods.
• The longer trend mattered more. Breaks of the 50-day below the 200-day were followed by losses on average. Today QQQ is still 5.5% above its 200-day.
• The edge is small. A few large rebounds made most of it, and some dips turned into 10–15% falls.
• Selling on every 50-day break cut risk but cost a lot of return. Whether that trade-off suits you depends on how much of a drawdown you can sit through.

Limits of this test

• The samples are small: 50 non-overlapping three-month signals in 23 years. A few trades move the averages a lot.
• A dip is a close below the 50-day simple moving average. QQQ often crosses back and forth several times in a few weeks; trades don’t overlap, so later crosses during an open trade were skipped.
• This is one fund in one market over a period when big US tech stocks did very well. Other indexes and periods may give different results.
• No trading costs, taxes or interest on cash. Costs would hurt the 50-day rule most, since it trades the most.

How we tested

• Signal: QQQ closes below its 50-day simple moving average after closing above it the day before, while its close is above its 200-day average.
• Trade: buy QQQ at the close on the signal day and sell after 21, 63 or 126 trading days. A new trade starts only when the previous one has ended.
• Comparison: the same holding period bought back to back whenever QQQ was above its 200-day, over the same dates.
• Data: prices adjusted for dividends and splits. Each test ends on October 29, 2026.

Run it yourself

Opening formula for the dip test on QQQ:

ticker(qqq) and price cb sma(50) and price > sma(200)

In the Strategy Backtester, set “Close position after” to 63 bars. For the 50-day trend rule, open with this formula:

ticker(qqq) and price > sma(50)

and close with:

price < sma(50)

To see which Nasdaq-100 stocks just crossed below their 50-day average, paste this into the Formula Screener:

index(nasdaq100) and price cb sma(50)

And to list all Nasdaq-100 stocks now below their 50-day:

index(nasdaq100) and price < sma(50)

Ready-made screens: Crossed Below 50-Day MA, Below 50-Day MA, Above 200-Day MA and Nasdaq Movers. You can also describe a screen in plain English in the AI Stock Screener.

Backtests run on MarketInOut data on October 30, 2026. Past results don't guarantee future returns.