Yo Pit Crazies,
So just yesterday here, I said the bombing campaign in the Iran Conflict was just the start.
We needed to see the Strait of Hormuz open up for a real volatility smack and market rally.
That is the equivalent of sending in the troops in the old days.
Not one day later this happened:
- 90 ships supposedly got through the Strait of Hormuz
- Trump tells the rest of the world to get your own oil
- The current Iranian President want to make a deal
SPY jumped near 3% and VIX dropped 4 points in a day.
SPY 30 Day Chart
Is this the beginning of the end?
One thing that has continued apace is the continual aerial bombardment and destruction of Iran’s conventional and nuclear capabilities.
The largest bombs of the war dropped last night and took out a large portion of "Missile City”.
I do not know if that contributed to the overtures but the USA is sending more assets to the Persian Gulf. Israel and the USA will keep pushing until there is 0 offensive capability in Iran.
Right now, that is the clear objective, negotiations or not.
It is early days
While the 3% move today was positive, the Strait still needs to be secured or at least taken out of play as a choke point.
I can believe that leaders around the world are looking for ways to increase output everywhere except the Persian Gulf.
China gets a fair amount of oil from there so sooner or later that pressure will hit Iran.
The Next Rally
I do expect stocks to bounce a bit more on good news and fall on bad news but today feels like a corner is turned.
There will be bumps but Iran is losing and they know it. They have no cards left to play.
That means many stocks that made lows recently will not sit there. I am looking for those stocks. Private Equity names and restaurants are turning up on my scanner.
Usually things don’t stay in the basement forever.
To get follow up intel and more, check out the Ceres Club at this link.
To Your Trading Success,
AG