S&P and Nasdaq futures indicate a strong open this morning, on the back of plunging crude prices.
S&P and Nasdaq futures indicate a strong open this morning, on the back of plunging crude prices. WTI crude is down more than 6%, to close to $83/barrel. Apparent White House de-escalation in hostilities with Iran has given a lift to tech market sentiment. Every rational investor, however, has to be asking the same question: How durable is this pause? We’ve all seen this pattern before, and recently. Without agreement from the Iranian side, how long can it last?
There are reports that the decline in crude is technically driven, that sell stops were triggered by unexpectedly high inventory reports. That’s not the same thing as a fundamental unwinding of tensions. Ships are still not transiting the Strait at anything like a normal pace, with about 10 commodity vessels per day moving through (vs. about 100 normally). This isn’t over.
It follows that experienced traders will hesitate to chase this open. Resolution of the technicals in the oil market could easily result in higher crude over the days ahead. Risk-on is back for the moment. AEHR, CRWV, ASTS, HUT were all up more than 3% in the early pre-market. However, trading “chops,” short-term trades, are the order of the day. The agile trader won’t get married to any new positions. Watch the Kapnotes board for updates throughout today’s trade. Visit our free blog at kapnotes.com/blog.
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