Right… I know it’s our job to analyse markets and make informed investment decisions with a sensible risk–reward profile. That’s the game.
But anyone who thinks they can outguess what the Islamic Revolutionary Guard Corps will do, or what Donald Trump might come out with in the next hour or so, is simply deluding themselves.
You all know my view on trading during a war scenario – I’m not a big fan. But when the news is murky, riddled with political bias, and the main players say one thing and then do another, then quite frankly… on your own head be it.
As we moved towards the weekend, everything was going what we English like to call “tickety-boo.”
Trump had increased the US military presence in the Strait of Hormuz, the IRGC were – apparently – complying, and ships were starting to move again.
And then, when the markets closed for the weekend, we found out that wasn’t quite the truth.
Ships were being turned back, and the US Navy ended up firing on an Iranian vessel.
You could almost hear the toilet paper unravelling over the weekend, as those who hadn’t closed positions started working out the potential damage to their accounts.
Now the so-called two-week ceasefire period is about to come to an end, and we’re all sitting around waiting to hear what Trump is going to do next… as if he’s going to give us advance notice!
God only knows – and perhaps not even he does – what happens next. So keep your powder dry.
At the moment, oil is the only real game in town. Yes, you can have a go at predicting where it’s headed and how it feeds into your favourite market – but as I’ve said for weeks now, you’re guessing, not analysing. So don’t stake more than you’d be prepared to lose on a flutter at the casino.
If you feel the need to play, keep it very short-term. Short term charts, quick decisions. This is not the time to play hero.
Personally, over recent weeks I’ve been looking at commodities – not gold or oil, but the quieter stuff. Non-ferrous metals and agricultural markets. They’ve put in some decent gains, with cocoa up nearly 20%. Nothing spectacular, but a few profitable trades without the headache that those trying to be superstars have suffered.
What happens next? It’s a guess. (Or it is when I am writing this)
If things escalate, oil goes higher, inflation follows, gold firms up, and Bitcoin may hold steady. The dollar might ease further – because whatever the optimism coming out of Washington, the US won’t be immune to higher energy costs.
Equities have held up reasonably well, helped by oil and defence names, along with the ongoing enthusiasm for anything with an AI angle. But we have to stay mindful of how quickly things can change – one rocket, one headline, one comment.
If things calm down – more specifically, if the IRGC back off – oil should ease, and we’ll be playing a very different game. But what happens elsewhere won’t be so straightforward.
The reality is, we don’t yet know how much damage has been done, and we won’t for some time. What we do know is that the longer this drags on, the worse it gets.
So, if you’re expecting everything to return to “normal” the moment the rockets stop, you might want to rethink that.
Geopolitics is unreliable at the best of times. What’s happening now – however long it lasts – will have longer-term consequences.
So, my advice remains the same: keep your fingers off the buttons, please, keep your powder dry, and just sit it out a little longer.
Your bank manager will thank you.
Please note the political opinions expressed above are those of the author himself, and do not necessarily reflect the opinions of JP Fund Services AS.
The post YOU WERE WARNED! first appeared on JP Fund Services.
The post YOU WERE WARNED! appeared first on JP Fund Services.
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