Where is Verizon headed next?Verizon Communications Inc.BATS:VZiShowGreenSome quick points about the slight dip Verizon experienced over the past 5 trading days. Did bears step in and reject higher prices for VZ? Is the potential for a rally over? In my opinion. No. But why you ask? This stock trades relatively inverse to 10 year treasury yields. The 4 down days recently coincided exactly with 4 green days for 10 year yields. This is because if treasury prices fall, and thus yields go up, it makes Verizon theoretically less appealing because though you will generate less yield from treasuries, they are backed by the US government. So in order for Verizon's yield to be more competitive with treasuries, naturally the price declines. When treasury yields drop, VZ can naturally rise, because the dividend can decline relative to price, and it's still appealing. This wasn't investors souring on Verizon, or the bears rejecting a rally, it was investors worrying about US debt repayment, and demanding higher interest payments from the government. So why did yields spike for 4 days? The Big Beautiful Bill. Basically if the government borrows a bunch of money, and investors think that maybe there is a risk that they won't be able to pay them back, they demand a higher yield (treasury prices fall, and yields go up). But if you ask me, that yield spike may already be over. The market tends to over-react to big news like this, and there are a few things happening right now that favor VZ going higher, I will list them below : 10 year yields have been trending down for months, they spiked, but only touched the top of the downtrend channel before retreating. They look poised to continue the downtrend for the second half of the week. Remember, the trend is your friend. Until yields break this channel convincingly and create an uptrend, you can assume they will continue downwards. When tech stocks fall, yields tend to fall even faster, because investors seek the safety of treasuries to preserve capital and wait out the dip, which pushes bond prices up, and drives yields down (good for high dividend stocks like VZ). Most tech stocks, and the QQQ ETF are looking very overbought. Earnings season is coming, but it looks like all of that action has already been priced in. There are bearish divergences appearing all over the place in tech stock RSI charts, I personally started closing out some positions already. I'm still bullish on tech into the end of the year, but right now there is a lot of risk chasing the big names higher IMO. This is the longest stretch of days in 3 years without a 5-10% correction, which is already a red flag in itself. I won't be surprised to see some of the big names start to pull back as early as tomorrow, some of them have already begun to pull back. At least a minor correction looks highly probable, a deeper correction within the next few weeks. 10 Year Bond futures bounced and started climbing today (albeit, just a little, but in the right direction). The market seems to be forgetting that US Treasury Sec. Scott Bessent's former job was literally selling US debt (driving yields down). He has made a career out of pushing yields down, and has stated it's his major goal with this administration. And like Elon said "if you are betting against the bond market, I think you are on the wrong side of that bet." (in short, this is a bullish theme for dividend stocks which are sensitive to yield fluctuations). All in all, my thesis from previous posts remains. VZ is going higher, so long as 10 year yields don't rocket to all-time highs and stay there forever, and there is no apocalyptic earnings report, I see no reason why it won't.