"Respect the Trend" Higher in Tech, Just Mind Selling Risk

• Tech and AI infrastructure sectors, including semiconductors (SOX) and software (IGV), are at all-time highs with strong upward momentum.
• The SOX index is significantly overbought with an RSI of 78, a level historically followed by short-lived rallies.
• Key risks include a potential mean-reversion pullback due to overbought conditions and a 'sell on the news' reaction to upcoming mega-cap tech earnings.
• The VIX is currently elevated at 19, suggesting that despite market highs, there's underlying uncertainty, making protective options strategies worth considering.

The discussion focuses on the current market's all-time highs, particularly in tech and AI-related sectors like semiconductors (SOX) and software (IGV). While acknowledging strong upward momentum and the need to 'respect the trend,' the analyst warns of overbought conditions and potential 'sell on the news' events for upcoming mega-cap tech earnings. Investors are advised to consider protective strategies like collars or put spreads due to elevated market volatility (VIX).