How Markets Are Actually Reacting to Current Crises

Panic sells, but it rarely offers good advice for your investments. Right now, I see the media predicting the worst everywhere due to international tensions. However, with my 30 years of experience at the CME and CBOT, I can reassure you: the reality of the charts is quite different. In this analysis, I will share my mental framework for dealing with all of this. Basically, I will show you why the tech sector is exploding while manufacturing stagnates, and how a single good one-hour trade was all I needed yesterday.

The Disconnect Between Anxiety and Reality

Honestly, everything is fine in the financial markets. There is no global panic. Fear-mongering media are mostly just looking for clicks by talking about secret weapons in Iran. In fact, the intensity of retaliations is decreasing day by day.

The only real hotspot right now is the advance into Lebanon to counter Hezbollah. That’s where things could get tense. But overall, the stock market is ignoring these dramas. It’s the triumph of the anti-hype: markets are absolutely not crashing. By the way, gold isn’t even acting as a safe haven right now; its price has actually dropped.

Index Analysis in 4 Points

To get a clearer picture, let’s review the structure of the main markets:

1. The CAC 40: It’s somewhat the weak child of Europe. It logically hit its 8,400-point support level before bouncing back.
2. The DAX 40: It’s holding its monthly supports extremely well. The major bullish signal would be seeing a nice 'W' (a double bottom) forming around 23,800 points.
3. The Dow Jones: Industrial stocks are at their lowest. During times of war or uncertainty, a stratification occurs: precautionary savings take precedence. To use a simple analogy, a worried consumer isn’t going to go out and buy a new sofa. Retail and distribution logically suffer.
4. The Nasdaq: It’s the exact opposite. Tech and defense are fully capitalizing on the situation. The Nasdaq is cheerfully holding above 25,000 points.

Discipline and Asymmetry: My Trade of the Year

Consequently, this strength in the Nasdaq allowed me to have what will likely be my best day of the year. I spotted a double bounce on a support level I really like, and it took off in a straight line… In just one short hour, the gains were equivalent to a teacher’s annual salary!

But be careful, here is the essential nuance: risk management. When I felt my little heart start beating faster, I cut everything. That is discipline. Knowing how to prioritize your capital over your ego. Making that much in an hour is totally exceptional, and you don’t make that kind of money every day. A professional trader knows how to stop the excitement to protect themselves.

The same relatively calm observation applies to crypto. Bitcoin is slowly creeping up, blocked by its minor resistance around 74,000, far from its highs for the year. It’s stabilizing without any excessive hype.

Conclusion

In summary, current cycles are rewarding technology and shunning traditional consumption. Keep a cool head, target good entry zones, and avoid doomsday theories on social media. As for me, I have to let you go… I’m off to the dentist to potentially get two teeth pulled. See you Monday, maybe with big hamster cheeks!

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