Having traded the markets for as long as I have, this level of corruption is unprecedented even by 2007-08 financial crisis standards.
I mean, maahh gawd!!!
No markets are safe this time around: equities, futures, prediction, crypto, etc. – trades being timed and positions being built-up en masse, prior to key military strikes and tweets (Truth social posts!), just so the powers that be can rake in millions/billions profiting from artificially created volatility in the markets; stuff that the normal public is absolutely clueless about and has no way of knowing (Inside Information) – and are the ones left holding the bag.
The US-Iran war has created the perfect money printing machine for the people behind the scenes – those involved in the decision-making process – effectively legalizing corruption, with the folks involved only caring about their own bottom-lines and PnL statements.
The volatility and wild-swings we are seeing since the US-Iran war started, has wrecked havoc on many retail investors and smaller accounts – personally some of my trades have blow-up in my face (and no this is not me rage-posting!) – where it is becoming harder and harder to navigate the market volatility on a day-to-day, minute-to-minute, tick-by-tick basis.
The playbook has been simple: Deception and Misinformation.
On one hand:
“Deal is coming”, “Iran is begging for a Deal”, “We’re going to sign a deal pretty soon”, “Deal will be signed this weekend”, etc.
On the other:
“I’m going to blow-up the entire country of Iran”, “Bombings will be resuming this weekend”, “US hits Iranian missile launchers in self-defense strikes”, “We will strike Iran harder than we did last week if they don’t get their act together”, etc.
All the while, you can see the futures move (RTY, ES, NQ) right before a Truth Social post goes out, or before some conflicting report where US claims are rejected by Iran or vice-versa.
Hedged >> Un-Hedged >> Unhinged
That’s the pattern; and everyone’s playing a game of chicken.
Hedge Funds, Mutual Funds, Pension Funds, and all the big institutional investors are so deeply entrenched, no one wants to see past the smoke, see things for what they truly are: a total and absolute sham.
Hence, every dip is being bought, and the first opportunity they get, they are offloading their positions on the unsuspecting retail investors.
With Inflation on the rise and a higher for longer Fed, bubbling asset prices, and highly levered-up AI trades, this soup is perfectly poised to boil-over.
When? Don’t know.
As Bear, it’s hard out there. Every trade that I take, no matter how methodically well-researched and well-structured, even I don’t know when I might get laid out on the Guillotine.
The Next Phase
This ain’t over: any potential deal or agreement signed between US and Iran, is only as good as Monopoly money – good to play around with; gives the players a false sense of wealth; but cannot be used in real-world transactions.
The flood-gates to Hell have been opened, and the Rubicon crossed.
Do not buy any news coming out of either camp: US or Iran.
Here’s the thing:
Israel is the biggest black-swan here – they decide whether any deal/agreement between the US and Iran can have even the slightest chance of holding-up; and it is not in their best interest for this deal to go through.
So, it stands to reason that Israel may do whatever it takes to sabotage any potential deal or peace talks.
Iran now holds a knife to the artery of global energy supply ie. The Strait of Hormuz – and they’ve tasted blood. They now are aware of the power/leverage they hold over the world economy, and they’re not stupid enough to let go of that power.
Prepare for Iran charging tolls (regardless of any sham deal/agreement) for transit in the Strait of Hormuz.
Prepare for Iran blackmailing the world into submission, by starting and stopping transit through the Strait of Hormuz at will – thus securing an insurance policy against further attacks and making sure all their demands are met.
Also, with regards to the Nuclear issue: especially after the decapitation strike and a war of choice started against them, anyone in their right mind would be delusional to think Iran would abandon/give up their Nuclear ambitions.
If anything: they will now accelerate and bolster their Nuclear program and defenses.
Strictly from a Game Theory perspective, we’re just getting started.
The world has been changed forever. Things will not be “Business as Usual” from here on out.
An even bumpier ride lies ahead.
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