The market gets earnings season and inflation data while missiles fly over the Strait of Hormuz. Perfect timing. Retail traders now have to decide whether Nvidia's quarterly guidance matters more than the fact that oil tankers are being turned into Roman candles.
June inflation numbers drop next week. Economists will parse whether eggs cost three percent more than last year while the entire Middle East catches fire. The Fed will read the report very carefully. They will adjust policy based on rigorous analysis of backward-looking data that assumes geopolitical stability. Geopolitical stability does not currently exist.
Investors are trying to position themselves for corporate earnings while Iran and the U.S. resume hostilities. This is like studying for a chemistry exam during a house fire. Sure, you might need to know molecular bonds later, but right now the roof is collapsing.
Technical analysts don't care. The 50-day moving average crossed the 200-day moving average last month. That signal remains valid whether or not the Persian Gulf becomes a war zone. Support held at 4,200. Resistance sits at 4,400. These levels do not change because some country launched missiles at some other country.
The VIX will spike. Retail traders will panic-sell on Monday morning. By Wednesday they'll buy back in because some analyst said the quarterly reports look strong. By Friday they'll panic-sell again because another tanker exploded. The chart doesn't care about their feelings. The chart just measures their mistakes.
Inflation data comes out Tuesday. Earnings calls start Thursday. Bombs fall whenever. The calendar remains undefeated.
Photo by Martin Sanchez on Unsplash
Leave a Comment