Stocks were on track for a fourth-straight down day Thursday amid renewed concerns about the Middle East. U.S. crude futures jumped nearly 3% and back above $ 50 as long-simmering tensions between Saudi Arabia and Iran morphed into a proxy war in Yemen.

In recent trading, the S&P 500 was down 0.7% and in negative territory for the year; traders are now watching the March lows of 2040 as the next key technical level while more bearish forecasters are predicting a retest of the January lows below 2000.

The market’s failure to break out to a new high last week after the FOMC statement “and the developing weakness that led to Wednesday’s drop was a negative signpost,” writes noted short-seller Doug Kass of Seabreeze Partners. “Yesterday, the Nasdaq Composite had the largest down day since April 10, 2014. The market leader, biotech, dropped by 4.4% — the largest down day of the year — while transports have dropped by nearly 5% this week. In the past these sort of drops have been readily absorbed; this time I am not so sure.”

Rising bullish sentiment — the latest Investors Intelligence poll showed 56% bulls and just 14% bears — was “something of a short-selling trigger for me” and a technical argument for the bearish case, Kass added.

Howard Lindzon, chairman of StockTwits, isn’t nearly as bearish as Kass but is “a little nervous” and “has reduced position sized after a couple of days like this.”

Overall, Lindzon believes “there is no bubble” in the broader market — nor private markets for that matter — but says the recent action in biotech is “very scary” and a sign of “real silliness” if not a bubble: At the end of last week, the iShares Nasdaq Biotech ETF (IBB), one proxy for the industry, was up nearly 21% year to date vs. a mere 2% rise for the S&P 500.

But the index has fallen more than 11% from Monday’s intraday high and suffered some major technical damage.

“We may have a seen the top there,” Lindzon says of biotech stocks. “There was a lot of chasing and lot of people are trapped right now. If the market sticks its teeth into these people they will be down 30% to 40% very quickly and we will see if we were in a boom or a bubble.”

The ‘boom’ crowd will no-doubt cite the industry’s huge opportunities, such as Biogen’s recent success with a potential treatment for Alzheimer’s. Those on the ‘bubble’ front will note new competition from generic versions of biotech drugs, as well as statistics such as the fact 63% of stocks in the IBB with market caps of more than $ 1 billion (as of March 20) have no earnings, according to Bespoke.

“Yes you have cashflow but you’re not making money,” Lindzon says of many biotech firms. “It’s a complicated industry and trades at it own valuations…needles-to-patients. This is how bubbles happen. I hope I”m wrong, but it felt like bubble behavior in biotech stocks.”

That said, Lindzon remains bullish on certain other stocks and sectors. Which ones? Watch the accompanying video to find out. 

Aaron Task is Editor-at-Large of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at [email protected].