Dale Pinkert argues the tech/semiconductor rally is near-term toppy on momentum divergences, while still allowing for a pullback that becomes a buying opportunity rather than a major top. He is also constructive on the dollar, yields, and oil, and bearish on gold/silver and near-term metals strength.
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Maggie Lake and Dale Pinkert discuss whether the Nasdaq/tech strength is a new bull leg or a blowoff top. Dale says the semiconductor leaders show multiple bearish divergences across timeframes, especially Micron and SanDisk, and he would not be long semis here; he expects a possible near-term correction in the S&P toward roughly 6,800 from the recent 7,200 area, with the correction likely led by weakness in metals and a further rally in the dollar. He frames the setup as a tradable pullback rather than the end of the broader trend, repeatedly saying he expects buying opportunities lower if the market pulls back first. He also thinks yields may still rise, which would pressure equities. …
Near term, semis and the broader market look extended and vulnerable to a pullback, especially if yields keep rising and the dollar firms. That setup is tradable rather than catastrophic, with fade/correction risk higher than breakout risk at current levels.
Over the next several weeks, the base case is a market correction that clears out momentum names and then re-establishes the uptrend if leadership and breadth hold. Validation would come from a controlled pullback, while a sustained break in semis or a stronger-than-expected yield move would shift the view more bearish.
Structurally, the AI/semiconductor theme still looks like the durable bull regime even if it needs periodic resets. The lasting question is not whether tech is strong, but whether leadership can remain concentrated without creating fragile blowoff conditions in the short run.
The semiconductor leaders are showing multi-timeframe momentum divergences, which makes the current tech rally look toppy.
He repeatedly cites divergences on weekly, daily, 4-hour and shorter time frames in Micron and SanDisk and says he would not be long semis here.
The S&P 500 could pull back from around the 7,200 area toward roughly 6,800, but that would be a correction rather than a crash.
He gives a measured count and frames the move as a tradable pullback, not a major breakdown.
The dollar still has room for one more rally leg before its broader bear market resumes.
He explicitly says he is looking for one more good rally in the dollar before the bear market resumes, possibly toward 102.
How are you thinking about the resurgent tech trade, particularly the monster move in Intel and semiconductors?
Dale is bearish on semiconductors near-term. He sees divergences on weekly and daily timeframes in SMH and Micron, noting that the stocks that led the advance became parabolic. He thinks we could make one more high but the sector looks toppy and he expects a correction back to around 6800 in the S&P. He recommends against being long and suggests aggressive traders could attempt shorts, potentially using cheap puts with VIX at 18.
Is the return to AI and semiconductors something that can sustain momentum and divorce itself from the rest of the stock market?
Dale says everything looks okay and frames this not as a final top but a buying opportunity — a pullback to buy, not chase. He sees a potential correction back to 6800 followed by a rally to 7800 a month later. He compares it to the April lows when he advised patience and making a shopping list of dream prices.
Do you think the socks will correct too?
Dale agrees that socks look like better shorts to him and that it's a great learning opportunity for viewers.
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