Flows Not Fundamentals
Now That’s How You Markup A Tape!
Flows Not Fundamentals
Let’s Go To The Charts!
Now That’s How You Markup A Tape!
“so the JPM collar pin of 6475 for end-of-day Tuesday ** could ** help to pull up markets to relieve the VIX backwardation we are in” 🤣😇
The above quote is from my March 30th client post, where I was right on direction… but not the intensity!!
I had given the 6475 target for Tuesday (6473.79 specifically) because it’s March quarterly options expiration and a very large & well-known $10B JPM hedge needed to be rolled at 2PM, causing the dealer hedging flows that can often lift the tape. Well, lift it did!
Markets shot higher with gold/silver as Trump said U.S. could end Iran war within 2-3 weeks - triggering a 3% trough-to-peak run that rose right into 6537 resistance before closing at 6528.
The timing was important: market was oversold and put holders were nervous. Then Trump out this morning saying, AGAIN, ‘war against Iran won’t last much longer & Strait of Hormuz will reopen automatically after US exit and other nations can reopen it’ (NY Post) 🙄
Just as Iran’s IRGC announced plans to attack US companies in the region starting TODAY - as retaliation for previous attacks on Iran.
"Iran’s IRGC issued a warning against 18 American technology companies including Microsoft, Apple, Google, Intel, and Boeing, stating they will be considered legitimate targets in response to terrorist operations carried out by the US and Israel, and announced that for every act of terror in Iran, the corresponding facilities of these companies will be struck as the IRGC said American ICT and AI firms play a central role in designing and executing assassinations."
Algos heard what they were programed to hear, and the weak hands holding short covered quickly.
Reminds me of another “policy intervention” fake news event:
More rally fuel came on the heels of CNBC citing Tehran’s President who they claimed, and later IRGC denied, had spoken with European Council officials and that Iran was prepared to end the war. A few hours later, Iran's Foreign Minister goes on Al Jazeera and completely dismisses Trump’s claims.
We know this game of tape bombs mixed with actual bombs can go on for many more weeks and months. We know the algo-induced headline right at critical EOM and more importantly EOQ JPM collar roll, can cause more whiplash and confusion. What we do not know is timing of these bombs is tough, but when these bombs drop you need to be tactical and quick, or zoom out/add time so you can be strategic and safe.
Also, be vigilent. The headlines conceal much. Like for example, also today, a 3rd US aircraft carrier headed to the middle east: the USS George H.W. Bush. And San Diego boat yards have some deliveries they are taking on board that are also hard to hide.
Trump has not given up on his 40-YEAR DREAM of taking Iran’s oil.
Trump Shares Decades-Old Clip of Him Calling for US to ‘Take’ Iran’s Oil
So, Trump tells Barbara Walters in 1987, The Guardian in 1988, then the Financial Times this Sunday he reiterated that his "favorite thing is to take the oil in Iran."
The market bounce doesn’t price that in, or the prolonged Middle East War that results from Trump-Netanyahu’s War on Iran to remove the regime, take their oil, and relegate them to vassal state that cannot defend themselves.
This doesn’t end with a peace deal, people. It’s not how Iran is wired, and it is not how Netanyahu is wired, and it is not in Trump’s plan to not try and put Kharg Island under American control. It would hurt China and benefit Israel — all the while financially benefiting Trump & his minions. Trump wants physical control of Iran’s oil and won’t stop until he has it or has been beaten badly trying.
I have said it before and I will say it again: IRAN RISK IS NOT PRICED IN.
