Buy The Bombs Sell The Trumpets
That’s the old market adage when it comes to war which I am not sure applies to whatever the conflict we’ve had in Iran. The idea is that markets sell off into war, bottom on war beginning, rally and then sell off on peace. Frankly, given how we have seemed to have an agreement almost weekly for months, I am a little surprised that markets are surging so much pre-market. It’s been the worst kept secret of the year. But my job is to analyze the data and behavior at hand. And in this case, enjoy what could be a rip roaring day for the bulls.
If all holds true, equities look to be higher by 1-2%. Gold is surging. Oil is plummeting and bonds are quiet.
The major stock market indices recently pulled back 5%, the deepest bout of weakness since the March bottom. The S&P 500 is poised for new highs this month and looks healthy.
The mega cap-driven, AI heavy NASDAQ 100 is below. Wanna guess where it’s going? Right back to all-time highs after a quick and steep pullback. It is also healthy.
And before the naysayers start chirping the same bearish nonsense at me, the Russell 2000 is below which represents the small caps. Sorry bearish folks. This index is already at new highs with 3000 on target this month.
The best indicator of the current bull market is below. It is the high risk stocks divided by the lower risk stocks. Nothing for the bears to seize on yet.
Repeated calls invoking 1999 remain misguided, lacking facts and just plain emotionally ignorant. Other than that, they’re fine. “Risk on” markets will likely surge this morning. I am most interested to see what the defensive sectors do along with junk bonds and the number of stock participating.
More on this, oil and gold later this week.
On Friday we bought TTWO and more FJUN. We sold some MQQQ and some QLD.
