The unbelievable rally in semiconductors resumed this morning as the Philadelphia Semiconductor Index (SOX) has erased all of Tuesday's 2%+ decline and is just below its record high from Monday. As of this writing, the SOX is more than 14% above its 50-day moving average, and the closest it has been to that average since early November is 3.99%.

While the SOX has been making record highs for a number of weeks now, in just the last few days, it also reached another milestone for the first time in over two decades. The chart below shows the ratio in the price of the SOX to the S&P 500 since 1994. During the dot-com bubble, the ratio peaked at 0.9553 in March 2000 before crashing down to less than 0.22 in late 2008.In the 15+ years since that low, the ratio has been steadily digging itself out of that hole, and it finally saw the light of day last Friday, March 1st.With the SOX just recently crossing 5,000 and the S&P 500 trading at around 5,100, we're starting to get close to the point where the SOX could overtake the S&P 500 in terms of its price level.

While the SOX is up just under 20% on the year, the wealth hasn't been spread evenly across its components. At the top of the list, NVIDIA (NVDA) has rallied nearly 80% while Coherent (COHR) is up over 50%. Behind those two leaders, another eight stocks in the SOX are outperforming the index so far this year. However, that means another 20 components or two-thirds of the index have underperformed the index year to date. It may be a good year for semis at the index level, but try telling that to the third of the index that's not only trailing the gains of the index but also down for the year.

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