Key insights
- The author expresses concern about the rapid rise of the SOX index, drawing parallels to the dot-com bubble in 2000. Declining margin debt amid market highs is cited as a bearish signal, historically preceding corrections. The author's bullish sentiment is waning due to these factors and perceived speculative behavior in the market, particularly regarding AI-related pivots.
I was making fun of the doomsayers on reddit just a couple weeks ago when the nasdaq corrected more than 10% because of the war. However, this movement on SOX has a bad smell.
Last time SOX was up 50% in a single month was in Feb 2000. On top of that, margin level broke out of the longest consecutive increase and has declined for the past 3 months. Market breaking ATH while margin decreases has usually corresponded to a pretty nasty correction.
It's hard to keep my bullish goggle on with this and that allbirds ai pivot bullshit.