Here's what's driving it. And it's the kind of number that only shows up at extremes.
Momentum stocks just went full tilt. The spread between momentum and low-volatility names hit a 5-standard-deviation overshoot above trend. The largest in the history of the series.
Five sigma is not "stretched." It's a once-in-a-generation reading. The only other times the line spiked anywhere close: March 2000. June 2008. February 2021.
Look at what followed each of those dates.
Momentum works until the moment everyone is crowded into the same trade. Then it becomes the fastest unwind in markets. The further it stretches from trend, the harder the snap back.
The most cyclical sector in the market is now its largest bet.
Semiconductors are 22% of the S&P 500. Nearly a quarter of the most important index on earth, riding on the single most boom-and-bust industry there is.
Chips are the definition of cyclical. They overbuild in good
