Prepare for Long War.

Weekly Plan 3.1.26

While these markets go nowhere, and continue to frustrate those who only know only one game— buy tech stocks and watch them go nowhere, our asymmetric bets continue to do extremely well for our folks.

Look at Moderna for instance.

I became bullish on this at $25 and the stock is now trading above $50.

These 50 dollar DECEMBER CALLS that were only $3 a few months ago?

They are trading in excess of 18 bucks now.

See below.

Or the $10 Antimony stock which I shared only a few weeks ago?

It is trading almost $20 now. Up 100% within a matter of days! Almost no heat to the position!

To benefit from these type of moves, you have to take a longer term view to let the orderflow thesis play out. Give it room to play out.

You cannot benefit from such themes if you take a short term view, if you do not read every post. So read every post, even if nothing is going on in the markets. Especially, if you feel nothing is going on in the markets.

With MRNA, I think this is probably still headed higher, but the December CALL now is not a LEAP anymore. With barely few more months to go, this is now a short term call not a long term LEAP. Now if there is sell off and it falls to 5-6 dollars, may be some money can be made on it, but I would definitely not chase it here at 16-18.

It is up 600% now from that first buy point. It is not the same anymore in terms of edge.

With regards to the weekend adventures of the Empire in the middle east, I would not be rehashing all of it, I assume the reader probably already knows most conventional angles being covered online by now. Where I want to add perspective is how it may go down a few months to years from here.

So with the Ayatollah gone, the country can take 2 paths from here— a rubber-stamped puppet administrator, who will run Iran as another vassal state like the ones surrounding it in the region. Or the country descends into insurgency.

Do not believe the US based media which is bought and paid for— this was an extremely popular guy in the region so logistically replacing him and enacting a quick cultural turnaround (installing democracy.exe) in the country will be very hard if not impossible. Yes, from our western morals and standards, this is an extremely vile and unpopular guy, but to understand the whole game, you have to think how these people perceive him and hence my point of view on how this situation will unfold in coming days.

In my opinion, a transition into any sort of puppet administration will take time, and it could be months to years before any sort of normalcy appears in the country. In meanwhile, the military class in Iran will stage guerrilla like warfare on the neighboring Arab nations, especially the Emirates. This over time does two things— for one, it erodes away the carefully curated safe haven image for these oil rich states who have been trying hard for last decade to position themselves as a Mecca for the wealthy expats. No pun.

And then on top of that, I think it keeps pressure on oil prices. Nearly a third of daily oil consumed globally passes thru this region. Even a 1-2% disruption will make the oil companies skittish and reroute around Africa, which will most definitely send oil prices above a 100 a barrel and increase inflation in the Western countries.

Now a tertiary effect of this will be continued suspicion of a US dollar denominated system and the current bout of resilience in gold and the likes of copper, I think is here to stay.

Look there is a huge difference in using sheer AirPower and killing heads of states of sovereign nations, but it is whole another thing bringing about cultural changes in these countries. So, has anything of any positive been achieved in Iraq and Afghanistan some 20-40 years after their leadership was neutralized?

I will wait for an answer.

You also have to consider the fact that the US policy is very fickle and sensitive to prevailing political winds in the US itself. We have elections here in less than 8 months now. Any loss of political power for the prevailing administration could erode away any type of meaningful military support for these oil rich countries which themselves do not have any sophisticated military to protect themselves against an onslaught of Iranian missiles. If the democrats are big winners in the mid terms, I think they will strategically calculate that higher oil prices here in the US are better for their prospects in 2028 General elections. Many-many months ago, I said 54-60 dollar oil will now be the forever base of oil prices. At time of this post, Asian traders have reported buying oil in excess of $75 a barrel. Friday close was at $67.

So we will see how this pans out in weeks and days ahead, but at this moment, unless you have a very peaceful transition of power to a puppet President in Iran, I think this has all the potential to become a localized geopolitics quagmire with Oil as its key victim.

EMINI Levels

On the emini side we have carved out a multiple month tight range with no resolution in sight.

Now some may say that someone knew this war was coming and this is why the stocks were selling off and now that this war is “ended”, we should breakout and trade higher.

If you subscribe to that line of thought, we will need to see very early signs of this and I think one such signs could be we break above 6950 and then do not look back below this week.

Minus this, I think this range is here to stay.

We can lean on this 6950 or so level as potential weekly resistance to keep pressure on.

Scenario 1: We could see 6950 come in as resistance for a move back down into 6850 on weekly time frames.

Scenario 2: 6950 and 6800 will be my edge case levels for the week. If we are able to break thru these and hold, I think this could be a trend week.

Other themes

GRMN

I am liking this action in Garmin.