The war in Iran is entering into stage 2 which is longer than expected. As I have said it would pass through the Summer Solstice of June 21st and end before Aug 12th the total solar eclipse. Anyway, said long before it would not end just in a few days. Market is not yet paralysed but will be indifferent to it soon. The landing of Marine Corps or 82 Airborne Division will bring the fighting to another stage. In response to this I asked the AI to give recommendations to energy stocks which are quite hot these weeks.
XOM and CVX are blue chips of petroleum stocks and are also known as evergreen trees. They have their demand and fans at all times, but just see at what level you enter. COP, OXY and DVN are of second importance, but one more problem is that most petroleum or energy related stocks are quite high now, even if the war will last for a longer time, but hard to chase high in such a case. If you have such an idea, there is an ETF you can try which is XLE for it has really dropped a lot from $91 to $43 and now rebounded to $57. Those that wish to buy at low in energy stocks or ETF, this rare chance has come. Would you like to grasp it? Must handle with care!
Why would this happen? It’s a great regret that few people would report the verdict of the Federal Court of New York in Brooklyn that Pakistani youth Asif Merchant is convicted of being recruited by Islamic Revolutionary Guard Crops (IRGC) of Iran to assassinate Trump in July 2024. This news should not be missed no matter whether you are for or against Trump. Why did Trump take action against the Kharg Island suddenly, is it an immediate response to the verdict? The strike started tightly after the verdict! The UN cannot prevent this to happen and after that cannot prevent what follows! Just watch the disastrous outcome to happen. So, whether the UN can or cannot carry on its function, they cannot prevent World War III!
We can hardly know when the market will shift the focus away from petroleum. However, some more items need to be kept in mind is the GTC Conference of NVDA at San Jose from Mar 16-19. Mind that Jensen Huang has something special concerning light to announce. All tickets are sold out, when you want to join in and listen to Huang’s live speech, the ticket is worth US$2525, if you just attend the exhibition, it still costs US$930. The price of NVDA had been going horizontally for months since the good news of Nov, now is the time for a new impact to come. Something revolutionary!
The FOMC meeting of the Fed seemed unimportant, the much-appreciated Dot Plot chart is relegated to limbo, no one would care for it. Interest rates cannot replace the impact of petroleum. Put them aside after watching.
Looking further forward, one more thing should be aimed at besides the War in Iran, that is the Trump/Xi meeting from March 31 to April 2. It is said that China will buy 500 Boeing planes and H200 of NVDA. Mind that in the outlook of NVDA, they had already put down the sales of chips to China, not accounting for it, so any sales will surely be of good news.
The greatest worry of the market is that S&P is in a curved top situation. Any bad news in Iran would trigger a big black candlestick and push the price downward. But if you are calm enough, you should know that a drop from record high of 7002 is necessary, even up to 1000 or 2000 points is no strange at all. DJIA had started to drop since 50512 of Feb 10, normally Feb is a dropping month, therefore no need to be afraid. The year line at 45314 is support, last closing is 46558. NASDAQ (NDX) is mixed and averages are mixing downward. Greatest support is at 250-SMA which is 21194.
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.