The biggest problem with owning high-flying names is it's like driving a pickup truck with no shock absorbers – you're sitting up high and enjoying the view, but those occasional potholes hurt.

Yesterday, momentum took it on the chin, along with growth, but - somewhat amazingly - so did quality. However, I find it interesting that money flowed both into software (IGV) and traditional safe haven sectors.

Fear Factor

The Volatility Index (VIX) climbed 12.8% yesterday, but I’m surprised it didn’t climb even higher.

Interestingly, the bumpy ride that sparks a jump in the VIX (Fear Index) portends well for the months ahead.

For all the talk of irrational exuberance, this market comes down fast when there is a whiff of bad news, or unfortunately, developments in Technology (XLK). The story out of South Korea yesterday from a “local” media outlet could have been a plant by shorts. Either way, it took a monster slice out of global markets – billions of dollars. Perhaps there is an irrational fear?

Semis Need a Power Boost

The semiconductor growth forecast is beyond impressive, but the Equal-Weighted Semiconductor ETF (XSD) has seen its Relative Strength Index (RSI) and the rate of change (ROC) drift lower – the Micron (MU) report must pack a punch.

Micron Technology

The Street is looking for earnings to climb to $20.28 from $1.91 a year ago. That’s a thousand percent, which dwarfs the 762% climb in the past 52 weeks. Margins are expected to come in close to 80%.

Recent beats on a Non-Generally Accepted Accounting Principles (Non-GAAP) basis have been extraordinary. Buckle up!

Today’s Session

There is some bounce-back heading into the open, but the best levels of the morning have given way to increased anxiety.

After such an amazing rally, it's only natural that investors are anxious, but this has been an extremely narrow rally, driven by companies achieving feats perhaps unheard of in the history of public markets.

Sure, back in the dotcom era, earnings were growing, but not at this pace.  Moreover, there wasn't much organic growth.  I've written about how Cisco (CSCO) embarked on a series of takeovers that masked slowing organic growth.

Beware of Financial Media’s Obsession with Tops and Crashes

John Authers posted an op-ed last night on Bloomberg that acknowledges the fundamental drivers of the rally, but suggested technicals point to “over-excitement.”

That overexcitement isn’t showing up in the fear-and-greed index or the AAII retail sentiment report.

Moreover, while margin accounts are higher, USA households are sitting on $32 trillion more than normal – there is no mad dash to put every penny in the stock market.

Even if there were, it wouldn’t mean it was dumb. The problem is that many people arrive late in the cycle because they spent most of the rally reading and listening to naysayers, who often have ulterior motives and little real experience or expertise in investing or trading.

We’ll give you more on MU in the afternoon note.

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