Q: Hi, Sean. Traffic volume across the strait is increasing. If I have a long position in stock indices, such as ES1!7006.75, at what point should I take profits? Is this surge entirely due to CTA buying and short covering? This move to go long is somewhat puzzling and makes people lack confidence. What's your opinion?

A: I can't answer questions specific to a portfolio or a trade. I use trailing stops when price goes vertical. Hope that helps.
Equities primarily rallied on falling oil prices, which remain heavily negatively correlated with equities. Oil is falling on the absence of escalation headlines, as I mentioned before. Trump chose to go with the first option, as I outlined on X last Friday: avoid escalation to save Treasury yields, the stock market, the inflation print, and his approval ratings, all while claiming full victory. And as I outlined previously, if things continue to cool down, we could see oil grind down into the low 80s in the coming weeks and into the 70s in the coming month. This would create a buffer for equities.
However, it is imperative to understand that the war is still ongoing and, in my view, far from over. This is unlike the other conflicts we have seen since his inauguration, where the conflicts were initiated by Trump and, as long as Trump decided to move on, they were over. This time is different. The war was started by Israel. I'm not sure how deep I can go on this forum, but just know that expansion is existential for Israel, not dissimilar to Japan and Germany 100 years ago.
Whether Israel will go back to a proxy war with Iran or resume bombing Iran directly remains unknown. But we do know that more U.S. troops are arriving on a daily basis. Price action will tell us whether there is a new leg down and whether it has begun. There is no need to guess, as the market always tells you what to do. The closest example is that we called the bottom back when ES was trading around 6400 and the headlines were only suggesting escalation. All that said, stops are paramount in this volatile market.