"This does not seem to be due to individual “super cap” names like Apple, Google, Facebook or Microsoft, most of which are close to or right on top of their implied volatility readings from last August," the strategist observed. "Rather, it seems to be a more sector-wide observation."
According to Colas, this means that investors are treating technology like a "safe haven" relative to other sectors, a development that could break down if market conditions continue to deteriorate or the group posts underwhelming quarterly results and push the VIX index closer to levels seen in August.
The comparatively depressed level of the VIX index—while superficially indicative of lower levels of fear—isn't necessarily a positive development, he added.
"Many traders and market watchers I speak to want to see a real 'flush' in stocks before they feel it is safe to buy this market," the strategist wrote. "Most market participants would feel better about buying U.S. equities if that number were closer to 40."