Certainty is a fool’s errand in recent market dynamics.
The most seasoned traders would even admit that trading has never been about certainty. Still, more about careful planning and risk-taking – the former part is quite a daunting task with fundamentals changing by the minute.
The latter, however, is where traders can extract alpha by controlling their bias, sizing, and jumping ship with every market-changing headline.
Investors are looking for a dip to buy to profit from a real turn in the War. Still, despite better hopes for conflict resolution in the past week and a half, the overarching theme is one of fragile stability – De-escalation hasn’t yet materialized with Iran multiplying attacks, reportedly now directly targeting US companies (including Amazon Web Services servers).
On the other hand, US and Israeli attacks on IRGC infrastructures continue; nothing really changed there. But the largest panic component came after President Trump’s latest address at the White House yesterday, where he U-turned on his prior softer tone.
And that turn wasn’t welcomed by broader assets, which all tumbled, including Stock Markets and Futures around the globe, right as his speech started.
He did not mention a direct ground operation. Still, the Pentagon has been preparing for weeks of limited ground operation, which corroborates the deployment of Marines to the Middle East throughout last week.
That doesn’t bode well for any hopes of de-escalation.
Once again, the only real element that traders should watch is Oil and its price movements. Before hoping for the best, WTI would have to remain below $100 on a daily close, and a weekly close would be even better.
In any case, market volatility has been fragile, as volumes are lower amid the Passover and Easter holidays approaching, compounded by tomorrow’s NFP release (preview incoming).
