Summary

The market is experiencing a massive, extended rally led by semiconductor and tech stocks, reaching technical overbought levels. While momentum is euphoric, history suggests this level of vertical movement warrants caution, especially with upcoming CPI data and corporate earnings volatility on the horizon.

Key Topics

• Overbought Market: When an asset is 'overbought,' it suggests that buying pressure has exceeded fundamental value. In this episode, it serves as a warning that current market gains are reaching a point of exhaustion. It changes the listener's perspective by shifting the focus from 'how much more can this go up?' to 'how much risk am I taking at this entry price?'
• Semiconductor Supercycle: This cycle is the primary engine behind the current tech rally, with companies like AMD seeing triple-digit growth in recent months. It highlights that the market's current trajectory is tethered to the growth of AI infrastructure. It implies that as long as the hardware demand remains, tech stocks will remain highly sensitive to any news affecting the chip sector.

Key Takeaways

• Audit your portfolio for stop-loss settings.