Upside Panic Everywhere

Tech markets are experiencing extreme upside momentum and positioning, particularly in China tech and semiconductors, leading to a 'spot-up, vol-up' environment. While investors are aggressively chasing calls, downside hedging has become unusually cheap despite historic allocation highs.

Key Takeaways

• 1.China tech (KWEB) is breaking above a major negative trend line and reclaiming its 50-day moving average, signaling a potential aggressive squeeze higher.
• 2.Allocations to Info Tech are at extreme historic levels, with US Prime book net and gross positioning reaching the 99th and 100th percentiles respectively over five years.
• 3.A 'spot-up, vol-up' dynamic is dominating Nasdaq trading, as investors chase upside optionality while leaving downside exposure largely unhedged.

Table of Contents

• Upside Panic Everywhere
• Massive in KWEB
• Catch up
• Upside convexity
• Lot of longs
• SOXL mania
• Spot up, vol up
• The vol divide
• Skew smoked
• Will bond volatility MOVE?

Document Preview

Page 1 of 4

Subscribe for full accessStart Free Trial