Some gift
After a week of suspense, Donald Trump has just revealed Iran’s “gift.” A surprise that’s hardly thrilling the markets.
The 5-day ceasefire on Iranian energy infrastructure will now last 15 days. When the US president announced this yesterday, the Dow initially soared over 500 points in 5 minutes, but the rally quickly fizzled out.
While extending the bombing halt is good news on its own, it mostly highlights how the US and Iran can’t find common ground in a conflict that’s been dragging on for nearly a month.
Clearly aware that extending the energy ceasefire would fall short of the breakthroughs promised earlier this week, Donald Trump also unveiled Iran’s “gift”: passage rights for 10 tankers.
Here’s the rub: this concession looks more like a free sample from Iran to promote its $2 million toll per ship passing through the Strait of Hormuz than any real diplomatic victory…
The retrospective
Buyers started the day optimistic, trying unsuccessfully to push above the daily pivot point[1]. Short sellers’ counterattack toward the monthly support 3 hit its mark[2].
Buyers then tried to rally toward the weekly pivot point but couldn’t make it[3], and sellers seized the moment to press their attack and reach the daily support 2 target[4].
Today's trading plan
Short sellers still control the situation, having taken profits for now at the monthly middle S4 and allowing the market to bounce.
Despite the strong downward move, sellers remain relatively cautious while buyers stay relatively optimistic, suggesting the bearish movement has more room to run.
Given this setup, I’m still favoring short trades, but with quick profit-taking at key intraday levels as long as buyers haven’t really been trapped on the current bounce (which could happen above the 47,205 point resistance).
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.
Good signs
Strike zone
One Track Hides Another