Trump says the U.S. won't put any money into Iran. He said this at the G7 summit while meeting allies. The allies nodded because that's what you do when someone makes a declarative statement at a summit.
Here's the problem. Washington and Tehran signed a Memorandum of Understanding over the weekend. A Memorandum of Understanding is what people draft when they want to look busy but commit to nothing. It's the geopolitical equivalent of your manager scheduling a follow-up meeting to discuss action items from the previous meeting where you discussed action items.
Trump denies putting any money into Iran. Fine. The Memorandum of Understanding was already signed. So either the Memorandum involves no money, which raises the question of what the f*ck is in it, or Trump is standing at the G7 telling people to ignore a document his own administration just agreed to. Both options are hilarious for technical analysts because neither one moves a single stock price in a direction you could trade.
Retail traders saw this headline and immediately googled "Iran ETF." They found three. Two of them haven't updated their holdings since 2019. The third one is just a basket of European banks that once loaned money to a guy who visited Tehran. They bought all three.
The G7 allies smiled for photos. They shook hands. They signed nothing binding because binding documents require lawyers and lawyers cost money. Memorandums of Understanding cost nothing, which is perfect because Trump just said he's not spending any money anyway.
The technical setup here is crystal clear: a double bottom in credibility meeting resistance at the 50-day moving average of coherent foreign policy. The breakout level is wherever Trump decides it is tomorrow.
Your stop loss is the fact that you thought a Memorandum of Understanding between Washington and Tehran would affect your portfolio.
Photo by on Unsplash
Leave a Comment