Market Set to Move Lower After Iran Responds to Trump Threat
We’ll pick our spots, follow the data, heed signals and other confirmation points as tensions grow.
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The market is poised to move lower on Friday morning following the surprise attack by Israel on Iran, and the subsequent response that is sending oil and gold prices higher as well as defense stocks.
The latest suggests Israel’s attacks are ongoing while Iran says it will continue its nuclear activities despite Israeli strikes, even as President Trump calls on Iran to make a deal “before it’s too late.” These developments in the Middle East build on renewed geopolitical and trade tensions from earlier this week, amping up the latest round of uncertainty in the market.
Despite the uptick in the Cboe Volatility Index (VIX), early indications are investor sentiment continues to flash “Greed,” but we would not be surprised to see that sag lower if the reports we’re seeing on Friday morning continue. Coming off the market’s cumulative move over the last two months, we would be surprised if the combination of how quickly these Middle East developments came about and trade deal questions doesn’t spur some profit-taking by folks with a short-term horizon. Let’s not forget, it is Friday and that likely means traders will want to limit exposure heading into a weekend whose developments will dictate how the market opens on Monday.
Even though we’ve selectively put some cash to work recently in Elastic ESTC, Marvell MRVL and SuRo Capital SSSS shares, moves we made in late May still have our cash levels in low double-digit levels. That will help insulate the Portfolio near term while giving us resources we can selectively use should the right opportunity emerge.
With that in mind, we’ll continue to heed the ripped-from-the-headlines signals and confirmation points for the Portfolio’s strategies. Our next batch will be in your email on Saturday morning. We’ll also continue to monitor relative strength index (RSI) levels for the Portfolio’s holdings and share an updated table containing those figures as well as updated consensus EPS expectations on Monday.
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At the time of publication, TheStreet Pro Portfolio was long ESTC, MRVL and SSSS.
