Technology was the sector most heavily sold by hedge funds last week, with flows running nearly one standard deviation below the year's average.

Hardware and semiconductors led the way, driven by both the liquidation of long positions and the opening of new short positions.

However, calling this an "unwinding" strikes me as an exaggeration.

Technology still accounts for 19.5% of these funds' net exposure in the US—a level higher than 76% of readings over the past year—and the "Magnificent 7" remain near record highs.

Taking profits after a year like this is normal.

What catches my attention is something else: if the thesis truly stalls, there is still a great deal left to unwind.