We remain fully invested in stocks with strong fundamentals and bullish technical patterns, reflecting institutional accumulation. Despite heightened geopolitical tension from the Israel-Iran conflict, our charts still appear healthy, showing normal pullbacks. If the situation escalates and technical levels begin to break down, we are prepared to take swift action to protect capital and avoid significant losses.
Major indexes are flirting with all-time highs. Historically, highs tend to act like magnets, and while some consolidation or “back and fill” may be needed, the market appears determined to test those levels.
Last Friday, oil surged ~7% in response to the conflict. Interestingly, there was no corresponding flight to safety in the dollar or Treasury Bonds—both failed to rally. This disconnect is worth noting. A sustained rise in oil could pose a headwind for economic growth, potentially disrupting Trump’s economic agenda and weighing on risk assets.
The Fed is widely expected to hold rates steady on Wednesday, and the Bank of Japan is expected to do the same on Tuesday. However, the 20-year Treasury Bond dropped about 1% Friday, pushing yields higher. In past geopolitical threats, Treasuries rallied—this time, they didn’t. That suggests the market is more concerned about inflation than safety.
Gold responded as expected, rising toward all-time highs. Bitcoin, on the other hand, dropped around 1.5% on news of the war, showing that it wasn’t viewed as a haven in this environment. Junk bonds fell only slightly, suggesting investors still have some appetite for risk despite the headlines. Grace and Peace to Everyone!
Watch List: AER, ALAB, APH, AVGO, AXON, CLS, CRDO, CRS, CTAS, CVLT, CYBR, DAVE, EHC, ESLT, GEV, MIR, MTZ, NFG, NWG, PGY, PLTR, PWR, ROAD, UTI, WPM.