Good intentions
Donald Trump sparked a market rally on hopes of a quick resolution to the Iran conflict. But less than 24 hours later, that peace narrative is already falling apart.
Everything is going according to plan. The end of the war is just around the corner. The US is even “well ahead” of the 4-to-5-week window set for Operation Epic Fury. That was the message Trump delivered in his CBS News interview.
Markets ran with it yesterday. But in pre-market trading, the Dow Jones futures are pointing red as reality sets in.
Two reasons. First, the “magical thinking” isn’t backed by facts on the ground. Second, Iran has shown no sign of standing down, with the Iranian parliament spokesperson stating the country is “not looking for a ceasefire.”
The retrospective
Short sellers pushed price down to the weekly Support 1 early in the session [1], then dragged the market back to the symbolic 47,000 level (spot price) [2] before buyers stepped in, fueled by Trump’s remarks.
Buyers initially ran into resistance at the weekly pivot point late in the session [3] and then attempted to push higher after hours, targeting the symbolic 48,000 level and the monthly Support 1 at 48,134. That push failed [4].
Today's trading plan
This is not investment advice. This trading plan is shared for educational purposes only, to give you a window into how one veteran trader prepares and thinks.
Trump’s comments gave the market a bounce, but buyers never made it to their target at the monthly Support 1 of 48,134. Until that level gets taken out, short sellers remain in control and buyers are under pressure.
In this environment, I’m positioning short, targeting the stop-loss cluster sitting in the killzone around 46,333.
Happy trading!
Maxime holds two master’s degrees from the SKEMA Business School and FFBC. As founder and editor-in-chief of NewTrading.fr, he writes daily about financial trading.
The phony war
Controlled Skid
Peace pipe