Greetings from the mountains of North Lake Tahoe. When I began this post, the markets were strong across the board, but with the news that the Strait of Hormuz would completely open and Iran is apparently willing to hand over its nuclear stockpile once their assets are released, the markets are going absolutely ape.
Oil, the one asset suffering from this news, is in a total free-fall.
The bounce this month has been nothing short of jaw-dropping, and the charts you see on this page don’t even capture the Hormuz news. We have the /ES at lifetime highs:
The /RTY small caps also at highs, and mashed up against its broken trendline:
And the /NQ, heading for lifetime highs as well, and undoing about seven months of weakness in a matter of a couple of weeks.
Thus, we have come full circle (or full semi-circle, more like it). The VIX has returned to its levels at the start of the year.
The big question now is…………….what next?
What’s transpired obviously creates a tremendous political victory for the administration as well as a global sigh of relief from asset markets. New highs tend to beget more new highs, but at some point the buzz wears off and people actually start to look at valuations again. Yet……………when?
I can only express relief I am so light right now, and I can assure you that about a minute into the trading day, I’m going to be even lighter.
