Semiconductor stocks just went through one of the most violent swings in decades.
The SOX index fell 17% below its 200-day moving average last Thursday—the biggest negative divergence since April 2025 and the second-largest drop since the 2022 bear market.
For context: During the 2008 Financial Crisis, this metric hit -49%. After the 2000 Dot-Com crash, it dropped to -52%.
What makes this especially wild? Just five months ago in June, SOX was trading 75% *above* its 200-day moving average—the most overbought level since 2000.
So in less than half a year, semiconductor stocks went from extremely overbought to oversold territory.
This kind of whipsaw is rare. The speed and magnitude of the reversal tells you how quickly sentiment can flip when positioning gets crowded and macro headwinds hit.
Chip stocks have been the backbone of this bull market. When they move like this, it's worth paying attention.
The SOX index fell 17% below its 200-day moving average last Thursday—the biggest negative divergence since April 2025 and the second-largest drop since the 2022 bear market.
For context: During the 2008 Financial Crisis, this metric hit -49%. After the 2000 Dot-Com crash, it dropped to -52%.
What makes this especially wild? Just five months ago in June, SOX was trading 75% *above* its 200-day moving average—the most overbought level since 2000.
So in less than half a year, semiconductor stocks went from extremely overbought to oversold territory.
This kind of whipsaw is rare. The speed and magnitude of the reversal tells you how quickly sentiment can flip when positioning gets crowded and macro headwinds hit.
Chip stocks have been the backbone of this bull market. When they move like this, it's worth paying attention.
