Stock futures slipped after the U.S. and Iran exchanged airstrikes again. Traders are now weighing the latest events. They're using their brains. Some are even using spreadsheets.
The Middle East escalated. Markets noticed. Retail traders checked their portfolios and saw red numbers. They immediately opened Twitter to ask if this was a buying opportunity. The answer is no, but they'll buy anyway because a guy with a laser-eyed profile picture told them geopolitical tension is "already priced in."
Corporate earnings reports are due out later this week. Traders are bracing for them. Bracing is what you do when information might affect prices. It involves sitting. Sometimes standing. Occasionally refreshing a browser.
Iran fired missiles. The U.S. fired back. Futures dropped seventy basis points. A retail trader in Nebraska named his position "Operation Desert Margin Call" and went all-in on defense contractors at market open. He will lose money. Not because of the airstrikes. Because he bought after the move already happened. Classic Doug.
Technical analysts have been monitoring the conflict using Fibonacci retracements of previous Middle East tensions. The 61.8% level suggests this will resolve itself by next Tuesday. The charts also suggest I'm lying to you right now. Both things can be true.
The S&P 500 might open lower. It might open higher. It will definitely open. Traders who think headlines about airstrikes contain actionable information will trade on those headlines. Traders who understand that prices move randomly around a long-term upward drift will do nothing. The first group will check their accounts more often.
Futures slipped because someone sold more contracts than someone else bought at that exact moment in time, and we've all agreed to pretend the airstrikes caused it instead of acknowledging markets are just a continuous record of people guessing.
Photo by Saifee Art on Unsplash
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