When Michael Burry disclosed his short on the iShares Semiconductor ETF (NASDAQ:SOXX) on April 24, semiconductors were trading 43% above its 200-day moving average.

The reading was already the most extended in years and came after 18 straight positive sessions. The ‘Big Short’ investor told chip longs to sell. That call was early.

The gap between the chip sector and its long-term moving average has now widened to 60% in just 8 sessions since Burry’s call.

Chart: SOXX Trade 60% Off Its Key Long-Term Trend

SOXX rallied above $500 per share on Wednesday, the highest level in its history, after another 3.93% advance.

The fund’s 200-day moving average sits at $313.27. The distance between the two, currently 60%, is the largest since the ETF inception in July 2001, a span that includes the dot-com unwind, the 2018 trade-war drawdown, the 2020 pandemic shock and the 2022 chip recession.

And SOXX is the conservative reading. Nine of its constituents trade further above their own 200-day lines than the index does.

The Stretch Beneath The Surface

The 200-day moving average is a slow-moving line that tracks where a stock has typically traded over the past ten months. Think of it as the long-term anchor for a price. ...