Full Melt-Up Mode

The semiconductor sector has entered a parabolic 'melt-up' phase characterized by record-high RSI levels and aggressive upside volatility bidding. Despite macro headwinds, the market is heavily concentrated in AI leadership, creating significant vulnerability to a potential rotation or disruption in that narrow cohort.

Key Takeaways

• 1.Semiconductor indices are in an extreme melt-up phase, with the SOX index up 18% and the leveraged SOXL up 60% in just five sessions.
• 2.The SOX monthly RSI has reached 87, marking its highest level since the dot-com bubble era.
• 3.Volatility dynamics are skewed towards upside chasing; upside calls (vols) are heavily bid while downside protection remains cheap.

Table of Contents

• Full Melt-Up Mode
• Vertical
• SOX on steroids
• Overbought
• Modern-day record
• Upside semis fear
• Sold semis
• Without the general
• Have no fear
• Vulnerability

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