In this weekend's 433rd edition of Turning Points we have a 13 page note discussing how the events of this weekend between Israel and Iran shift the scenarios for the markets over the short to intermediate term, along with key price levels to expect in a best and worst case scenario. Additionally, significant shifts in the crypto market are discussed, along with how to best prepare for a scenario few expect to take place.
What follow is a brief preview from this weekend's note:
The conflict currently unfolding between Israel and Iran is a volatility enhancer.
As I will detail in the pages to come, this is an important concept to understand as it will influence how price structure evolves from this point forward.
Equally important to grasp is that conflicts of this nature are rarely, if ever, triggers for a broad trend reversal.
Again, going back to one of my favorite market axioms, “they don't ring bells are market tops.”
Those selling because they fear an expanding crisis in the Middle East are doing so due to the fact that this event is scary enough that they feel compelled to count their blessings, while heeding the sound of a loud bell triggering their decision to move into more conservative investment territory.
Essentially, when surprise geopolitical events take place you have a chaotic loop of fear and volatility feeding into one another, given the unpredictability of the time ahead and the feverish efforts of investors attempting to price in a new variable.
In my experience, trading through every conflict since the mid-90s, the primary trend prevails every single time.
The only thing that changes is that volatility is enhanced. What this means for price structure is patterns that are nice and neat, responding to support areas, while behaving in a somewhat predictable manner, become chaotic and unruly.
Basically, support areas are compromised. Daily bars expand significantly. And as a result, fear goes through the roof as investors fall into the trap of thinking a shift in trend has indeed taken place.
The envelope for volatility expands drastically, which is something many investors are uncomfortable with, especially when they are being pelted with an absolute barrage of scary news from all fronts.
To view the entirety of this weekend's note, you can subscribe by clicking here.
Zenolytics Turning Points is 430+ editions in and only getting better. Find out why institutions and individual investors have come to depend on our service through each and every type of market environment. Click here for details.
Disclaimer
This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice.
This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website.
T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing.
Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in, the transmission thereof to the user. With respect to information regarding financial performance, nothing on this website should be interpreted as a statement or implication that past results are an indication of future performance.
