Greenbull Investments Sarl
Greenbull Investments Sarl
Switzerland
3mo
Two weeks ago I told you the calm in oil was one headline away from flipping. Saturday it flipped. The US hit Iran over the weekend, with the market closed and no way for anyone to react until this morning's open. Look at the timing, because that's the whole story. You don't strike on a Saturday night by accident. Markets close Friday afternoon, the planes go Saturday, and that hands you a 48-hour window where the only people who can act on the biggest news of the year are the ones who already knew it was coming. Everyone else (regular investors, the group chats, you and me) just gets to watch the potential price gap open this morning and call it news. War headlines are also a very convenient cover for quietly getting positioned before everyone else can. Here's the part that should bother you more than the strike itself: fear isn't showing up. VIX, the market's fear gauge, went into the weekend flat, and stock futures are barely moving this morning. A real act of war against the country sitting on the world's most important oil chokepoint, and the fear gauge is shrugging. Either the market has already decided this is a one-time event it can ignore, or the reaction simply hasn't hit yet because everyone's frozen, waiting to see who sells first. Quiet before the news lands is not the same thing as quiet after. And remember what oil actually means here. It was never really about oil. It's Iran, then oil, then inflation, then what that forces a Fed that already has another rate hike on the table to do. On Thursday, core inflation (the PCE number the Fed watches most) came in at 3.6%, hotter again, and the market did what it's done all month: panic for a day, take it all back, close near the highs by Friday. Then the weekend happened and made Thursday's number look like nothing. The one thing that's driven this entire market since May didn't calm down this time. It got worse. So here's what I'm taking away. A market that walks into a weekend war with its fear gauge asleep, right after a hawkish Fed and another hot inflation print, is not a market that has actually priced this in. It's a market that hasn't been allowed to price it yet. Everyone's still crowded onto the same side of the same trade. This is the week we find out whether this market was ever as solid as it looked, or whether this is the thing that finally cracks it. Let's see how it plays out.
Not investment advice. The author may have financial interests in the mentioned instruments.
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