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Options traders were buying a lot of protection on the iShares Semiconductor ETF (SOXX)
on Tuesday. Puts traded 1.5x the 20-day average volume, 74,468 contracts. Options markets are echoing what you are already seeing in the charts. This rally is a roller-coaster.
The South Korean KOSPI Index
What troubles me is that I've seen epic rallies before. Although this move isn't quite as sharp as the one leading into the top before the 2000-2002 tech wreck (the PHLX semiconductor index rallied almost twice as much as the one we've seen today), I remember that volatility started to rise with price, something we're observing this year. I remember that the S&P 500 actually topped first, at the end of 1999, while tech kept rising for a couple more months before that bear market commenced. The S&P hit its high so far on June 2nd.
