Recently the market shows 2 typical examples of Curved (round) Top & Curved (round) Bottom. The former is in S&P and the latter in OXY. They are as typical as in textbooks, worthy of discussing very much. The greatest problem is that for OXY, the Curved Bottom already formed and really had a jumping gap up and nearly completed the measuring rising span. That means the room for rising is limited. However, the war in Iran is having a lot of variants, both on bullish and bearish trends, so it is still risky to chase high. But for S&P it is still in a Curved Top, waiting for a surprise of news to trigger the down trend. These 2 days, when WTI goes downward, the small white candlesticks of S&P are going upward, thus the fear of going down is lessened. NVDA is going horizontally, some people said that it would not maintain for more than 9 months as that in 2024.
Donald Trump postponed the trip to China simply because during war time, the president better stay in White House to manage the war. It is true that it will be more effective. Or else he not only has to bring about the keymen on the trip, but also a lot of equipment and facilities should go with him aboard. Above all, he would not like to have any other people monitoring his military orders and discussion. The postponement of the Trump/Xi meeting is two folded. No wrong, the above should be the major reason, or you can say he is pressuring Xi to join their escort service in Hormuz Strait, or ask China to show who they should stand for. By the side of Iran or the US? Anyway, 3 major indices had positive responses these days. WTI is still under $100 the Phycological barrier.
If an escort service of warships is successful, there should be at least a line of warships about 12 destroyers one by one as human shields to protect 8 to 10 super tankers going straight forward. The greatest problem is that the Hormuz Strait is really so narrow, that it has no time to shoot out interception when missiles come. The only way is to clear all onshore attack platforms. Israel is using drones to monitor all seaside movement 24-hour a day, when suspicious mobile shooting platforms are found they will be destroyed at once. So, they need to use special forces to occupy 3 islands on the channel which are Abumusa, Small Tonb and Great Tonb to act as unsinkable aircraft carriers as shown in page 1. The last card will destroy Kharg Island in the north at a critical moment.
Heavy aircraft carriers like USS Ford, USS George Bush and USS Abraham Lincoln are not suitable to pass the Strait this time, even though in the past they had entered the Persian Gulf in war time. Even the light aircraft carrier Tripoli cannot enter until all onshore shooting platforms are destroyed. What is the difference between an aircraft carrier and an amphibious assault ship? Why are they not named as aircraft carriers? The tonnage of an amphibious assault ship is just half of a heavy aircraft carrier. The greatest difference does not lie in the outlook; it lies under the deck. Heavy aircraft carriers’ underneath are hangers, resting a large number of different planes, but an amphibious assault ship is carrying marine corps, assault ships, trucks and tanks for landing. The force for landing can be up to 25,000 people. They are using F35B, that is for vertical taking off and landing. For heavy carriers, they are using F35C, catapult takeoff and arrested landing. F35A is the standard model for land bases in airports.
The focus of war is changing; Iran changed from attacking nearby countries to block the Hormuz Strait which is more effective. The US changed from pushing Iran to form a new regime to making the channel free. Not so many countries are willing to join the escort, for it is not a single trip, they do not know how long they need to run the service. How many weeks, months or years? Of course, there are some people sitting in an armchair and shouting, both sides should go back to negotiation at once. Those that had a market diary show know of the P5+1 talk started in 2006 for Iran and 6 party talk for North Korea started in 2003. P5 is the Five Powers of the UN plus Germany comes to P5+1. Twenty years have passed; can they stop the development of nuclear power in these countries? Anyway, the UN is unable to stop the advent of World War III and unable to keep the Hormuz Strait free for passing, for they do not have a super nation and super firepower to ask other countries to listen to them.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.