War Should End Soon (from US Side).
Daily Plan 3.10.26
Hey guys—
So from the Sunday AM weekly note, we had the exact low in S&P500 futures carved out in the session yesterday, along with the exact high in the Oil futures before a 45 point sell off.
It just so happened that both the levels almost coincided with Trump’s post about de-escalation with Iran.
So let’s talk about deescalation.
I think Trump wants to sincerely deescalate, this is not one of his trademark bluffs.
What we do in markets analysis is often drawn up some price scenarios based on various players, their intentions, their incentives etc.
There are two things which standout in last few hours coming from Trump:
Trump has made statements where he appears to be blaming Witkoff, Kushner, Pete and Marco and all, for this total fiasco we find ourselves in. He appears to exonerate Vance. This is important as it signals a willingness to calm things down. When Trump stops taking credit and starts blaming, this is often a clue that his perspective on a thing is shifting fast. If Trump thinks the war is going well, he will be taking credit, waxing eloquence on how this was the best war, the most successful war.
Trump’s call with Putin was another major clue. We will never find out what is said on these calls but in my view, Putin would have let Trump know what his red line is going to be. This whole region of Persia and Mesopotamia is an ancient trade route and access to markets between Europe and India/China, which I do not think any party is going to be willing to let go so easily. So expect tremendous amount of pressure from Xi and Putin on Trump to end this war. Also remember, Iran is right in backyard of erstwhile Russia empire as it borders Turkmenistan, a former USSR state to the North and then Pakistan to the East, with Pakistan being a key Chinese asset in the region. They not do not want a puppet state in their backyard. This is the exact same reason why Putin does not want NATO in Ukraine.
Trump being a rational business man, at a basic level understands that this war is net zero benefit if not negative to the US and his political fortune. As midterms approach and gas heads to $4 a gallon, he would be tired pretty quickly. We do not have a TACO trade for no reason. If you remove the emotions around this war, and if you do not see this from a religious lens, economically and financially, even from a national security perspective this is one of the most useless wars ever for the Americans. In fact, if this destroys the Middle East then expect forever high gas prices and expect a crash in the US dollars.
So my conclusion from all of this is war is on last legs from American perspective.
Now, the wild card in this is Israel. What I described above is from a perspective of a rational actor. An irrational actor is almost impossible to predict. Israel may have totally irrational reasons to want this war to continue or inflict irreversible damage on Iran and I cannot model that using any cogent, logical arguments.
It also remains to be seen that once and if this war ends, what catalysts there are for this market to continue to rally.
But while this is in play in intermediate time frames, I view this as below technical structure in the immediacy:
I think we have seen swing lows at 6580 and if this level for any reason gets retested, we could see a strong move here to the upside.
We are last trading 6800, and I can see an excess move take us back to 6900.
An interim level of interest here may be 6720-6730 today which if retested could offer support for a move back to 6800.
To summarize: I see Americans willing to scale down this conflict. And they seem sincere. This is net bearish for oil and hence net bullish for growth stocks, risk on assets in the short term. Long term trend of balancing may remain intact.
If you wanna see April 2025 playbook from tariff sell off, I will lean on 6580s being retested as more and more folks realize this — if retested, these lows could remain supported for a move back into 6900.
An intraday level of interest may be 6720. We last traded 6800 at time of this post.
My analysis is done based on recent events from rational actors who act out of self interest and follow a rules based approach to the game. Modeling irrational actors who may be acting based on “no rules” is impossible and can void this thesis in a moment.
~ tic
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