Stock futures fell after the U.S. struck Iran. Traders acted surprised that bombing a country might affect markets. This is what happens when you've spent three months trading based on whether Jerome Powell smiled during a press conference.
The Dow is still up 2.1% in August. Fifth consecutive monthly advance. None of that matters because someone just remembered that Iran exists and has the ability to respond to being attacked. Retail traders spent the morning panic-searching "where is Iran" and "can Iran close my Robinhood account."
Here's what technical analysis tells you about geopolitical risk: nothing. The 50-day moving average doesn't care about missile strikes. The RSI doesn't factor in whether oil tankers can move through the Strait of Hormuz. Support and resistance levels aren't drawn on maps of the Persian Gulf.
But every financial news outlet will spend the week pretending this changes something fundamental. They'll interview seven different strategists who will each explain why this means you should rotate into defensive sectors or buy the dip or hedge with gold or whatever justifies their continued employment.
The funniest part is watching traders who spent August buying stocks because "the trend is your friend" suddenly care about Iranian retaliation capabilities. You didn't have an opinion on Middle Eastern foreign policy yesterday. You don't have one today. You're just reading headlines and pretending they correlate to the chart patterns you don't understand either.
The market will do whatever it was going to do anyway. Iran will do whatever Iran does. Your portfolio will continue its slow march toward worthlessness regardless of either outcome. At least now you have something to blame besides your own inability to read a volume profile.
Photo by Saifee Art on Unsplash
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