One Current Market Observation:
The Iran conflict has pushed geopolitical risk premium back into markets, and oil is the most obviously impacted commodity. In the past, geopolitical risk premium in oil was quickly faded because production tended to never go offline. The current situation has been quite the opposite and already, in terms of barrels lost, might be the greatest oil supply disruption ever.
One Nugget of Trading Wisdom:
It’s so important to be able to recognize when a move is mostly fundamentally driven vs technically driven (of course, it isn’t binary, but more of a spectrum). Silver and gold at the start of the year were mostly technically driven. Oil has been fundamentally driven by real supply disruption. As a rule of thumb, you want to have more biases towards fading technically-driven moves and going with the trend on fundamentally-driven moves.
One Reflective Question:
For every market-moving headline, there are a dozen false positives. Do you have a system for determining which headlines are worth playing and which are noise?
One 1%-Improvement Idea:
The moves in oil are another reason to be enabled for futures trading. Become familiar with the differences between Brent and WTI crude contracts.
One Reading Recommendation:
Howard Marks is one of the only market commentators that I read, and his latest memo was exceptional. I think everyone enjoys speculating about what the future of AI holds for markets and the world around us, and I found this to be a great, thought-provoking discussion.
Forget outcome. Let’s get better this month.
