Tech Stocks Face Steep Drop? Oil and Yields Key

Summary

Yesterday, a presidential statement on social media halted oil's rise, causing a late-day stock market bounce, though Wall Street still closed down. The 10-year yield is now at 4.63%, pressuring markets. Oil remains in a wedge pattern, with a breakout potentially sending it to $115-$120 per barrel. Semiconductor stocks like Intel and Micron have already corrected significantly, with the SMH ETF showing a historical pattern of 240% bull runs followed by 40-50% pullbacks. SanDisk could see a 50% drawdown, and Micron might fall to $450-$460. Retail sales appear to be suffering, as indicated by Home Depot's earnings, with Walmart and Target's upcoming reports crucial for consumer insight. Cybersecurity stocks like Palo Alto Networks and Crowdstrike, despite recent strength, are nearing technical resistance levels that could signal a pullback. Natural gas continues to climb towards a target selling point, while gold and silver are holding short-term support but face significant downside if it breaks. Bitcoin is rejecting resistance around $83,000 and needs to hold $71,500 to avoid a fall to $60,000 or even $50,000. Ultimately, market direction hinges on oil and the 10-year yield; falling yields due to economic weakness is negative, while falling oil due to increased supply is positive for stocks.