June 23, the core battleground for AI trading is shifting from large tech stocks to semiconductors, but this rally is also beginning to show signs of a historic frenzy. The Philadelphia Semiconductor Index SOX remains in a steep upward channel, with a pullback to the 21-day moving average strategy continuing to be effective this year. However, this trade is becoming increasingly crowded. SOX is currently about 23% above the 50-day moving average, not reaching the extreme levels seen at the May highs, but short-term overbought conditions are quite evident.

More notably, SOX's monthly RSI has risen to levels near those during the dot-com bubble period. This indicates that the semiconductor trend remains strong, but the momentum has entered ranges typically only seen during historic euphoria.

Capital flows are also changing. The ratio of SOX to the Magnificent 7 has risen to its highest since 2019, suggesting investors are using semiconductors to replace large tech stocks to express AI themes. Goldman Sachs data also shows that the net exposure of the Magnificent 7 has recently declined, implying these tech giants are becoming the "funding source" for AI chasing trades.

Volatility markets are sending more complex signals. The VXN/VIX ratio has recently surged, indicating that tech stock volatility is rising faster than overall market volatility. The Market Ear believes this "spot price rising along with volatility" pattern is unusual, implying the rally remains strong, but both upward and downward structures are becoming more fragile.

Referring to 1995, SOX also experienced a sharp rise that year, followed by a painful correction, but that did not end the bull market; the true euphoria phase only began in late 1998. In other words, the current semiconductor rally may just be an early overheating within a larger cycle.

However, looking at 2000, the risks are higher. Comparing the MSCI Global Semiconductor Equipment Index with the Nasdaq from 1996 to 2003 shows that the current path of the semiconductor equipment sector bears similarities to the late internet bubble period. The author does not draw a definitive conclusion but leaves the judgment to the market: the current trend shows both signs of a bull market continuation and outlines of a bubble late stage.

Speculative fervor in the Korean market further amplifies these concerns. On highly volatile days, the gamma rebalancing scale of leveraged and inverse ETFs in Korea may exceed 20% of the KOSPI's daily trading volume, meaning leverage products could amplify market gains and losses.

Meanwhile, a rare divergence has appeared between the stock market and interest rate volatility. A sharp decline in bond volatility usually favors a rising stock market, but the S&P 500 has not fully reflected this signal. For bulls, this could mean more upside; for bears, it suggests that the current market is not fully pricing in risks. #Gate股票7x24小时交易