AI bull market hits critical fork in road, semiconductor market returns to '1995 or 2000' debate According to BlockBeats, on June 23rd, the core battlefield of AI trading is shifting from large tech stocks to semiconductors, but this round of gains is also beginning to show the characteristics of a historical frenzy. The Philadelphia Semiconductor Index SOX is still operating in a steep upward trend, and the strategy of buying back to the 21 day moving average has been effective since the beginning of this year. However, this transaction is also becoming increasingly crowded. SOX is currently about 23% higher than the 50 day moving average, although it has not reached the extreme level of the May peak, short-term overbought is quite evident. More noteworthy is that the monthly RSI of SOX has risen to a high level near the Internet foam period. This indicates that the semiconductor trend is still strong, but the momentum has entered a range that usually only occurs in historical frenzy. The flow of funds is also changing. The ratio of SOX to Magnificent 7 has risen to its highest level since 2019, indicating that investors are using semiconductors to replace large tech stocks to express their AI themes. Goldman Sachs data also shows that the net exposure of Magnificent 7 has recently fallen, suggesting that these tech leaders are becoming a "source of funding" for AI driven price chasing trades. The volatility market releases more complex signals. The recent significant increase in the VXN/VIX ratio indicates a rapid rise in the volatility of technology stocks relative to the overall market volatility. The Market Ear believes that this combination of "rising spot prices and increasing volatility" is unusual, meaning that the market is still strong but the structure has become more fragile both upwards and downwards. If we refer to 1995, SOX also experienced a sharp rise that year, followed by a painful adjustment, but that did not end the bull market. The true frenzy phase did not begin until the end of 1998. In other words, the current semiconductor market may only be an early overheating in a larger cycle. But if we refer to the year 2000, the risk is even higher. Comparing the MSCI global semiconductor equipment index with the trend of NASDAQ from 1996 to 2003, it shows that the path of the current semiconductor equipment sector is similar to that of the late Internet foam. The author did not give a clear conclusion, but left the judgment to the market: the current trend has both the shadow of a bull market relay and the outline of the post foam. The speculative heat in the South Korean market has further intensified this concern. On days of significant volatility, the Gamma rebalancing scale of South Korean leveraged and reverse ETF traders may exceed 20% of KOSPI's daily trading volume, which means that leveraged products themselves may amplify market fluctuations. At the same time, there has been a rare divergence between the stock market and interest rate volatility. A significant decrease in bond volatility is usually beneficial for the stock market to rise, but the S&P 500 index has not fully reflected this signal. For bulls, this may mean there is still room for upward movement; For bears, it means that the current market's pricing of risk is not sufficient.