1. Oil’s Wild Ride: Don’t Confuse a Bounce With a Bottom
As I write this, Brent crude is hovering near $99 and WTI is in the high $80s, trying to figure out if there’s a real deal or if this is just another Trump TACO.
The Strait of Hormuz is still the pressure point here — if Iran decides to act on that threat, this market goes right back to triple digits without asking permission.
Don’t get run over trading around geopolitical headlines. Its extremely headline driven market.
Also, I do think there’s some willingness to stop this war on both sides, but Iran will need a lot more convincing. They have tried twice and got bombed. And, I think they know very well how strong negotiating position they are in at the moment.
2. Gold Stabilizing — Dip Was A Blessing In Disguise?
Gold is sitting around $4,550 this morning – up roughly 3.25% from yesterday.
Majority of the gains came after we got more confirmation that ceasefire talks are happening in Pakistan.
Look, as I have said before too; gold is at an interesting place. Its up slightly year-to-date, but at the same time entered bear market if you look from highs made in January. Plus, the economic backdrop got interesting as well.
If you’re watching, maybe this pullback was a blessing in disguise. But don’t be surprised if things get choppy alongside every Iran headline.
Big levels to watch: $4,100 and $4,400 on the downside. $4,800-$4950 on the upside.
3. S&P 500: Up on Futures, But the 200-Day Moving Average Tells the Story
Almost immediately after the market close, we got the headlines that ceasefire talks are happening. The S&P 500 futures jumped. Great, right?
Know this: the market is dancing to a geopolitical tune right now, and that’s a dangerous place to be positioned aggressively. Stops are very important because just this morning, there’s noise about Iran rejecting the ceasefire talks.
As I have been saying for few days now: watch the 200-day moving average closely — that’s the big story. It has been tested few times and rejected. Is market trying to go lower? If we get a close above 200-day moving average, then there could be some relief.
4. Bitcoin…
For those who follow crypto world closely, there were few headlines going around before Israel and U.S. attacked Iran that said something along the lines of “Iran uses a lot of bitcoin/crypto…. this could send bitcoin soaring.”
You see, that was a narrative that didn’t really play.
Throughout this was, bitcoin has essentially been flat. It’s certainly off the recent lows, but its flat since the madness began and down year-to-date.
What’s ahead? I have been paying attention to correlation between gold and bitcoin. I see certain moves happening here that suggest bitcoin moves up (not a recommendation to buy or sell). If $75k breaks, we easily see $85-90K. On the downside, support around $65k.
Obviously, time will tell more. Ceasefire might be more bullish for bitcoin than the war. If war continues, don’t be shocked to see nothingness.
5. Canada, U.S. Dollar, Yields And Private Credit
Canada is navigating a trade war, a shooting war that affects its biggest commodity, a struggling housing market, indebted consumer, dire sentiment, and a central bank with very little room to maneuver. Don’t forget this. I think worse is possibly behind us, but not out of danger zone whatsoever.
U.S. dollar is choppy at a very interesting level. Watching it closely. Has a potential to come back down 96.5 on the DXY is a big level worth watching if it does drop.
I continue to find it amazing how mainstream financial press is brushing off private credit redemption issues as essentially, “retail investors,” issue. I hear very little about interest rates, valuations, and collateral problems. It’s almost $2.0 trillion market… what if some major banks are exposed to this?