Counting chickens
Deal done. More than 100 days after Operation Epic Fury kicked off, Washington and Tehran are set to sign the long-awaited peace agreement this Friday.
Great news that investors are once again rushing to celebrate before the ink’s even dry. But let’s not count our chickens before they hatch…
While markets are buying Iran’s promise to end the war on all fronts, Trump’s pledge to immediately reopen the Strait of Hormuz, and a lasting rally in stock indices, the disappointment risk is very real.
First, because the market has been pricing in this resolution for ages. Second, because no agreement will magically erase the lasting damage from the conflict: inflation scars, broken supply chains, and shattered confidence among key players.
These are consequences Kevin Warsh will likely dig into this Wednesday during his first press conference as Fed Chair.
My trading plan
Once again, Dow futures are trying to start the week on the right foot. But just like last week, caution remains the watchword.
Trapped since early month just points away from the monthly Resistance 1 level, buyers have been mounting a fresh bullish assault since Thursday on the back of the US-Iran agreement. But the market remains vulnerable.
Given this setup, I’ll continue to favor bearish trades on any new bull trap, if and only if all three conditions of my trading system align.
🎬 Video example of my trading system with commentary [+€3,500]
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.
Cliff dive
Floating Free
Wing and a Prayer