Market's Fate In Iran's Hands As Trump Calls For De-Escalation; Selling in Gold

Stock Market's Fate In Iran's Hands Please click here for an enlarged chart of SPDR S&P 500 ETF Trust (NYSE:SPY) which represents the benchmark stock market index S&P 500 (SPX). Note the following: The chart shows the stock market is making a lower low. Prudent investors should note that the lower low is in spite of aggressive buying by the momo crowd and a serious attempt by President Trump to stop the bleeding. RSI on the chart shows that despite making a lower low, the stock market is not oversold. The chart shows zone 1 (support) is ahead. In yesterday's Morning Capsule, we shared with you: Until this morning, the U.S. had refrained from attacking Iran’s energy infrastructure. Israel has attacked Iran oil storage facilities. In our analysis, restraint by the U.S. has been prudent because if the U.S. were to attack Iran’s energy infrastructure, Iran would attack the energy infrastructure of U.S. allies in the Gulf. South Pars gas field has been attacked. South Pars is a very large gas field in Iran. The U.S. was correct in its strategy of not attacking Iran's oil and gas fields. But in the fog of war, everything does not always stay under control. Iran quickly retaliated by attacking LNG facilities in Qatar causing "extensive damage" at Ras Laffan. Ras Laffan is the largest LNG facility in the world. President Trump tried to control the situation by calling for de-escalation and saying Israel will not attack South Pars again. Iran has rebuffed President Trump and has continued to attack energy infrastructure in Saudi Arabia, Qatar, the U.A.E., and Kuwait. The situation is dynamic. The latest from Iran, as of this writing, is that Iran plans to continue attacking energy infrastructure in Gulf countries in retaliation for the attack on South Pars in defiance of President Trump's call for de-escalation. As the chess game continues, in a remarkable turn of events, the U.S. is saying that it may lift sanctions on Iranian oil on the water. The U.S. objective is to keep a cap on oil prices. In our analysis, such a move will give more dollars to Iran, helping it finance the war. Treasury Secretary Bessent is floating the idea of making Kharg Island a U.S. asset. Kharg Island is a part of Iran, and 90% of Iran's oil is exported from Kharg Island. We have shared with you before that Iran was concluding that a long war was in its interest. The latest Iran defiance of President Trump's call for de-escalation indicates that Iran is not ready to end the war. Here is the key question: Even with Iran deciding that a long war is in its best interest, how long can Iran take the pounding of the American might? The answer is not clear at this time. There are two scenarios: Iran comes to the table, and the stock market stages a rip-roaring rally. Iran continues to attack energy infrastructure, oil jumps over $140, and the stock market falls. If the stock market falls, support (shown on the chart) is not far off. Initial jobless claims came at 205K vs. 215K consensus. Gold is falling, please see the gold section below. Micron Technology Inc (NASDAQ:MU) earnings were a blowout, surpassing whisper numbers, but MU stock is falling, dampening overall sentiment. Magnificent Seven Money Flows Most portfolios are now heavily concentrated in the Mag 7 stocks. For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. In the early trade, money flows are neutral in Apple Inc (NASDAQ:AAPL). In the early trade, money flows are negative in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc (NASDAQ:TSLA). In the early trade, money flows are negative in S&P 500 ETF (SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ). Momo Crowd And Smart Money In Stocks Investors can gain an edge by knowing money flows in SPY and QQQ. Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil. The most popular ETF for gold is SPDR Gold Trust (NYSE:GLD). The most popular ETF for silver is iShares Silver Trust (NYSE:SLV). The most popular ETF for oil is United States Oil ETF (NYSE:USO). Bitcoin Bitcoin (CRYPTO: BTC) is seeing selling. What To Do Now Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals. The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter. Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.