Press Releases
The current market remains driven by the headlines relating to the conflict playing out in the Middle East. To be sure, traders have shifted their focus from selling AI-related technology/software positions to what I'll call the "war playbook."
It will suffice to say this is not the first conflict in the Middle East, nor is it likely to be the last. But since we've seen these things play out many, many times before, we know what to expect going forward. Well, kinda, sorta, anyway.
You see, the war playbook is usually pretty straightforward. First, traders move to risk-off due to the fear of what might happen. From there though, trading tends to be driven by how the war is going - aka the headlines from the front.
In this case, the frequent headlines are often conflicting. One minute we're told the US/Israel war on Iran is almost done. The next, we hear the conflict could last weeks or months. As such, markets have been held hostage to the news and expectations of what might happen next.
The Indicator Conflict
In my world, the recent price action in the markets has created another type of conflict. Technical versus Fundamental. The big-picture market indicators versus the big-picture macro backdrop.
On one side of the ledger, you have significant deterioration in the technical indicators. So much so that several of my trusty, longer-term market models have moved to sell signals.
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