It's a foggy war out there
The big news yesterday was Trump TACO’ing from his threat to strike Iran’s power infrastructure.
The news sent stocks ripping higher and oil ripping lower, and also made a lucky Trump insider hundreds of millions in profits in the futures market.
The moves retraced a bit after Iran denied it was having talks with the White House, and reports later surfaced that the WH is speaking to Iranian parliament speaker Mohammad Bagher Ghalibaf. Us traders are dealing with a tremendous amount of noise, but the reality is that nothing has changed over the last 24 hours - US troops are still en route to the Middle East, missiles and bombs continue to fly in both directions, and the Strait of Hormuz remains closed.
Despite being long-term bearish equities and Treasuries, I closed my shorts on the futures Monday open as my gut feeling, trained from years spent in the global macro trenches trading Trump headlines, told me that attacking Iran’s power infrastructure was a threat that Trump would TACO on. This gave me the opportunity to reload my shorts at much better levels in ES and TY less than 12 hours later. ES is trading within a well-defined parallel channel that will inform my stop loss and take profit levels as I navigate this conflict.
Meanwhile, the Saudis are getting closer to entering the war, a move that would expand the conflict to other Gulf countries. Meanwhile, one of the largest refineries in Texas is in flames after a large explosion. Coincidence, or terrorism?
Behind the paywall: Why this rally in risk is a sell, and a case study on when gold bottoms during crises
