Upside Pain

The market is in a reflexive melt-up phase led by semiconductors and AI exposure, characterized by inverted options skew and aggressive call chasing. This behavior mirrors 1997 but carries extreme concentration and leverage risk.

Key Takeaways

• 1.The market is experiencing an extreme reflexive melt-up phase driven by semiconductors behaving as levered momentum instruments.
• 2.Options markets are showing 'pure upside panic' with a significant explosion in inverted skew and call chasing.
• 3.Current market behavior is closely tracking the 1997 historical analog.

Table of Contents

• Upside pain
• 1997 mode
• Inverted
• This is your market
• Call vs put skew
• Sign of the times
• Levered flows
• Got hedges?

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