NDX

As I mentioned last week, a peace deal is extremely difficult to achieve, and as we saw this week, neither side showed up for the scheduled peace talks. Similar to North Korea, Iran will not give up its nuclear program or its control over the Strait, as I have mentioned repeatedly in previous notes. Even if we do not see escalation from either side, oil prices will not drop back below 80, as this is the only card Iran needs to maintain a favorable position in negotiations. If producers around the world start to increase production, I would expect Iran to start disrupting the Bab el-Mandeb Strait to push oil prices back to a level where it can wield its power. That is why this war could drag on for years.

As I outlined in previous posts, the path of least resistance is to the upside after SPX broke above the key resistance around 6870. I expect SPX to pull back from the 7200 area as early as next week.

SPX bounced from its lifeline.

Tighten your stops as price goes vertical.