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Posted March 23, 2026 at 12:55 pm
Surprises of the sort that we got this morning should no longer be surprising. On Friday, we mused that while some market participants were banking on the concept of a “Trump Put”, the strike price on that mythical put was murky at best. Well, it didn’t take long to discover the answer. This morning, around 7AM EDT, we learned that the strike price was either 6,500 on ES futures and/or 4.45% on 10-year yields. Whether we call it “TACO” or a put exercise, it’s what investors wanted to hear.
[Coincidentally, on December 4th we published our 2026 price targets of 6,500 for the S&P 500 (SPX) and 4.45% for the 10-Year Yield. Whether it comes to basketball or investing, I am not foolish enough to declare victory before the end of the first quarter.]
The reason for today’s justifiable enthusiasm was the following post on Truth Social. It was modified a few minutes later to correct spelling, but the message was the same.
Source: Truth Social
Prior to the social media post, things were looking somewhat bleak in pre-market trading. Pre-market ES futures were trading almost 1% lower after sharp declines in Asia and Europe. Bond losses were more subdued, but the 10-year yield was 7 basis points higher, nonetheless. We can see the instantaneous reversals in the chart below:
Today, ES June Futures (1-Minute red/green candles, right scale), ZN June Futures (blue line, left scale)
Source: Interactive Brokers
The prices of May Brent (COIL) and WTI (CL) crude plunged similarly and simultaneously, for very good reason.
Today, CL June Futures (1-Minute red/green candles), COIL June Futures (blue line)
Source: Interactive Brokers
The following, more granular chart, shows an interesting anomaly. Note the small spike lower in May Brent crude futures (COIL) at 10:49 GMT, about 15 minutes before the social media post. That seems a bit, um, convenient for whomever sold the futures aggressively. (We saw a small spike in ES futures a few seconds later, proving our assertion that stock futures are using oil futures as a “lead”.)
Today, COIL May Futures, 1-Minute Candles
Source: Interactive Brokers
What then should investors do if circumstances in the Persian Gulf have indeed changed? For starters, it remains sensible for equity traders to continue to follow developments in oil and bonds. They remain most sensitive to the changing situation around the Strait of Hormuz, and if something in the region changes, oil, then bonds, will reflect it first.
Quite frankly, oil traders have the ability to be laser-focused on the events that affect their commodity. They are purely pricing changes in supply and demand for their products and thus are less distracted by the other factors that affect stock prices. Energy prices certainly have effects on perceptions about inflation, which then directly affect bond prices. Both factors, along with myriad others, then play into stock valuations, though the relationships between them and earnings/revenues/cash flows can be a bit murkier.
We can see from the chart below that SPX has given back about half its intraday gains in the time it’s taken me to write this piece. We also see that the 200-day moving average, which briefly offered support last week, offered resistance today. We have not come close to breaking the pattern of lower highs and lower lows, nor have we made sufficient progress to turn shorter- and longer-term moving averages positive. Your risk tolerance should decide whether selling rallies remains the better short-term strategy, or whether nimble, two-sided trading remains better suited for you.
Even under the best circumstances, we don’t know when or if tankers will be transiting the Strait anytime soon, whether the ceasefire – for more than the initial five-day period, and the extent to which a combination of higher insurance rates and destruction of regional oil and gas facilities will keep energy prices elevated. It is indeed encouraging to see a pivot from the President this morning. Whether or not this has led to a meaningful change in policy or simply a one-day bout of “socially acceptable volatility” remains to be seen.
SPX, 10-Months, Daily Candles, with 50-day (top line), 100-day (middle line), 200-day (bottom line) Moving Averages and line at 6,520
Source: Interactive Brokers
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Trump is a convicted liar. That should answer your question. He’s lying. As always.
Definitely TACOing now that we know he had no plan or clue what he was doing.
It’s the carrot and stick form of negotiation. The IRGC and the brutal Islamic regime respond more to the stick. Especially when they know the President will use it. Since this analogy likely escapes you, I’ll put it in terms you can understand: TACO is off the menu.
“Note the small spike lower in May Brent crude futures (COIL) at 10:49 GMT, about 15 minutes before the social media post.” Enough said. This is what he and his gang do.
why do people have to be so skeptical and unkind about everything? why not be glad that the USA is trying to be sure the Iranians do not get a nuclear bomb and that if we succeed the world will be a better off ! Does Trump derangement always have to enter the equation and prevent seeing what is happening ?
Here is a summary of Trump’s decisions about Iran’s nuclear program from Politifact: Under the 2015 Iran nuclear deal, Iran agreed not to pursue nuclear weapons and allow continuous monitoring of its compliance in exchange for relief from economic sanctions. The agreement was set to expire over 10 to 25 years. President Donald Trump withdrew from the agreement in 2018. He broke his 2016 campaign promise to renegotiate the agreement. President Joe Biden said he wanted a “longer, stronger” agreement. That didn’t happen, either. Trumps’ cancellation of the Iran agreement in 2018 removed some limits on Iran and may have led to further development of nuclear weapons in the interim. Maybe wars were started as a result. Over the past 3 years, and especially the last 3 weeks, a tremendous amount of suffering has ensued among supporters of the Iranian government and innocents as well. So maybe Iran will now choose to enter into another agreement not to develop nuclear weapons. But will they “forgive and forget” what has happened over the past 3 weeks and become America’s “friend” and never pose a threat to us (or the Israelis”) in the future? Don’t bet on it!
Why are you speaking as if the current Iranian Regime has ever acted in good faith? They’re religious fanatics who execute their own people for “Crimes against Allah”.
They upheld their end of the nuclear deal. The US did not. Since the attack of Feb 28, they’ve done what they said they would. No one should be surprised.
The events you outline have radicalized a generation. The bill will be paid over the years to come.
If trumps mouth is moving he is Lying. What ever he does you have follow the money, everything he does is about money for him. Don’t think he cares anything about you or the American people – Wake up!
You’re a complete moron. Get help for your TDS.
Sadly, there’s no cure or help for that affliction. Abraham Lincoln’s contemporaries hated him just as much. History will be much kinder to the current President than it will to those who revile him.
The answer to your last question, unfortunately, is a resounding YES.
Trump is a loose canon. His actions are reckless. If I was an 80 year old narcissist who only cares about his ego, I would applaud his actions. What is his message? The lesson from this is pursue your quest for nukes. Ukraine paid the price for trusting security guarantees from the U.S.A.
Y’all, it’s a FWB thing….they get to front run with absolutely no fear of consequences.
When honesty is degraded and lies prevail then whole world looses integrity, that is much bigger loss for humanity in the long run. Shame on you Trump for ruining the world !
I never thought I’d see the day when Americans became apologists for a very far right Fundamentalist regime like the Islamic Republic of Iran. They’re so vile, their own civil population despises them.
well that’s not true. If every of their own population despises them who support them? On the contrary, most people (which by US definition are not civil) support this regime. They are very religious people and practice extreme Islam
Most people support the brutal fanatics running Iran? You seem to be having trouble differentiating the regime and the IRGC from the Iranian people. We are not the same as them. I’m an Iranian exile. I’d love it if you could walk a mile in my shoes. Educate yourself.
Many Americans are too distracted by their own domestic politics to see how good they have it. This causes them to make terrible statements. For example, they seem to be in agreement with Iran’s Parliament Speaker, Mohammad Bagher Qalibaf, who’s a liar and murderer.
Thanks, Steve. A good analysis. Kudos!
The volume spikes in both oil (Sell off) and the eMini S&P (Extreme spike higher ~200 Points in 5 minutes…$10,000 per contract), 15 minutes before our corrupt antichrist PIG president put his LIES out on Propaganda Anti-Social is the definition of CORUPTION AND MARKET MANIPULATION FOR THE BENEFIT OF THE TEFLON DON’S CRIME FAMILY AND HIS TWISTED MINIONS! MAKE CORRUPTION GREAT AGAIN !!!!