Couple of dates to consider and some connecting dots, or wishful timing or playing pundit
- Trump gives Iran 10 more days to open strait
- The May 14, 15 dates for Trump-Xi meeting
Trump buying more time for the army to prepare to patrol the strait and keep it open. There is a realization, the strait has to be open one way or another within another 3 to 4 weeks, otherwise the hit to the global economy will be severe. Also the next 2 week recess gives time for the republican congressman to sell the war and then still have time to pivot before mid-term campaign gets busy and sell Iran victory, China deal, etc. So this timeline may be in consideration when Trump moved the Xi summit to May 14-15. So that Trump to get the Iran war over declare victory, take one week of victory lap, and then go to China.
Now, I expect peak volatility, uncertainity will be around 2nd, 3rd week of April and recovery starts in may, the market could potentially move sideways or range bound until November and finish the year strong.
These are some timeline in my mind, on when to start buying and how long I have to endure the pain in my existing positions.
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Geopolitical risk is one of those things the market prices in fast and then forgets faster â people trying to time entries around Middle East tensions have historically left a lot of returns on the table waiting for clarity that never really comes. Energy stocks get a short-term pop, everything else dips, and six months later most portfolios look like nothing happened. Staying positioned rather than reactive is almost always the better call.
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Looks like either Army needs more time, or thinks it is going to lead to heavy casualty. You can fire the generals who deliver bitter truths. But that doesnât change the ground reality. For 72 hours Trump is not seen public, assuming he is busy listening and going through his options. In any case, the thesis and timeline still holds. I may not buy the dips, but may buy some call options on dips.
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Iran is calling Trumpâs bluff⌠the usual playbook of escalate to gain negotiating leverage is now being turned around⌠things are boiling up⌠Let us see who blinks first.
We are on the threshold of another âobliterationâ, this time for war crimes-worthy sort of things like targeting civilian infrastructure and worse.
So I got to thinking, what would Iranâs response be, should tonightâs deadline at 8:00 and Trump not chicken out *(Iâm sorry, delay because negotiations are going so well.)
If I were Iran, I would just target all the oil facilities elsewhere: Iraq, Kuwait, Saudi Arabia, UAE, Qatar, and the other half dozen countries within drone range which may be lesser oil producers. My reasoning would be simple: I cannot defeat the US military directly, but I can injure America greatly by pushing up the price of oil worldwide and bringing it in for universal condemnation. Sure it would hurt me, but Iâm gonna be hurt no matter what.
Doing so with drones is pretty easy; Iran is said to have thousands of them (in addition to its missile stocks) and the effects would be instantaneous. More than that, if Iâm able to math, the oil in tankers loaded 6 weeks ago, as the hostilities began, is now at its destination, and after that the pipeline is pretty empty. There might be some residual stuff laying around but mostly the strangulation of the Strait will start to show up bigly.
Make it worse. Send the financial system on which the US and other allies systems are built into turmoil. Play the âOh yeah? Watch this!â Card.
Buckle up. Itâs gonna be a bumpy ride.
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Already administration and their allies are calling our Iran for war crimes, yeah âIran using citizens as shieldâ is against geneva convention⌠but our own actions, which are also war crimes, prompted them to do that is somehow overlooked.
US president calling for âwiping out an entire civilizationâ⌠how far we have traveled from âyes we canâ⌠the price this nation pays for electing a black president⌠sigh.
Hopefully the economic cost might bring some sense, and everyone will walk back.
The market this time didnât panic big time, just a slow drift lower. I think after seeing his post, Donny is ready to declare victory and move on. He is ready to move on to the âGolden Age of Middle Eastâ.
I think now is the time to buyâŚ
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This ceasefire is not going to be smooth, it will have its up and down days. Israel is still bombing Lebanon heavily, like never in history before, and ships are not moving through the strait, Iran is claiming it will take time to remove the mines, and until such time you have to work with us, and Saudiâs are angry and calling Iranâs demand for toll is âextortionâ. In the meantime, President is preparing to attend âmemecoin conferenceâ and declared âWe are getting ready for the next warâ!!!.
So the market is going to be bumpy. Now, Yesterday was a gap up day!
BTIG Research noted that using $SPY since 2003, there have been five prior times when the intraday low was at least 1.5% above the prior dayâs intraday high. In other words, a âtrue gapâ of at least 1.5%. Of those five prior occurrences, 4 of the 5 gaps remain unfilled today. The 2009 event filled the gap 7 days later, then rallied meaningfully from there. Forward returns were higher every time looking out 2, 4, 8 and 12 weeks later. Median 4- and 8-week returns + 6.09% and +9.1%, respectively.
I know many dismiss these kind of technical analysis with contempt. So, those, who believe, if we get a retest, that is a great buying opportunity. I am taking some profit from the recent trades, and placing orders, that could get filled if there are any sharp intraday moves.