Trading this market has become an exercise in changing your mind before the next headline does it for you.
Believe me, I'd know.
But what's the deal with the new Hormuz deal?
Well, this is a reported 60-day framework for the opening of the Strait of Hormuz, where Iran and Oman, countries that sit on opposite aisles of the body of water, are coming together to set agreements on shipping arrangements.
Currently, there is no official agreement confirmed. That will happen later on today, but of course, markets are behaving as if this is a done deal, and are rallying on even as we speak.
This divergence makes the rally fragile and dangerous to chase.
As exuberant as markets are, visible shipping has not confirmed the relief trade.
But markets have moved from “talks are progressing” to “the barrels are coming back” without waiting for matching signatures, IRGC implementation or a meaningful recovery in shipping.
The question is: will the reopening of the Straits remain uncomplicated enough for the markets to not care?
Read the full article on why the markets right now have a severe divergence between reality and expectations.
