If you were up late you may have noticed social media lite up about the Israel strike on Iran. I was watching the futures market and thought about sending an email alert, then I thought they could have push the market back up by the morning. And they did.

Of course it is Options Expirations week and the market makers do not want to have to pay out too much.

Lucky for the market makers, the Israel attack was limited. Investors now think it will have a limited effect on the market. Don’t tell them Israel hit Iran’s air defense for the nuclear development which signifies this was a first wave strike and they are now accessing whether the air defense is down.

Back to the charts. Stock futures took a hit and did bounce back by morning. But this is the second time we’ve had a short flight-to-safety event and we saw Bitcoin sell off with stocks while gold rose (hint).

Post OpsEx week will be interesting since the market makers can reset their risk and let things happen. It could get real interesting if Israel launches more waves this weekend and Iran responds.

All the Fed talking heads are now indicating later interest rate cuts. The Europeans and Japanese are in a bind since they want to cut sooner. A lot of investors will need to re-evaluate their predictions to the downside if inflation and interest rates are not going to come down.

Then there is the problem of liquidity which we discuss on our website.

The real fun has not even begun,

Michael Bond

Categories: Perspectives, TSP Charts