JPMorgan Warns Off AI Dip-Buying With Bubble Score at 687 as SOX Nears 20% Bear-Market Mark
Updated
Updated · kucoin.com · Jul 17
JPMorgan Warns Off AI Dip-Buying With Bubble Score at 687 as SOX Nears 20% Bear-Market Mark
1 articles · Updated · kucoin.com · Jul 17
Summary
JPMorgan’s quant team said investors should avoid buying AI semiconductor dips for now, with its AI Bubble Sentiment Score still at 687 and the alert not expected to clear before about Aug. 12.
That score has started falling from a June 29 peak, but it remains in the top 5% of historical readings, a zone where JPMorgan’s backtests show a 53.8% chance the Philadelphia Semiconductor Index drops more than 8% in 20 days.
The SOX has already fallen about 19% since its June 22 record high, and JPMorgan says rallies can still be reversed by narrative-driven panic while bubble fears dominate U.S. trading.
JPMorgan set three entry thresholds—629, 560 and 418—and recommends phased buying only after the score drops below 629, when drawdown risk falls to about 30%.