To The Moon

U. S. President Donald Trump delivered a national televised address on the evening of April 1, unilaterally claiming a "swift, decisive, and overwhelming victory" in military operations against Iran. He also stated that the U.S. will continue to heavily strike Iran over the next "two to three weeks," while negotiations with Iran are simultaneously proceeding. His remarks have utterly shattered the market's expectations that the "U.S.-Iran war" could end in the short term. Moreover, his approach of negotiating while launching military strikes strongly highlights an anxious state within the Trump administration: attempting to stabilize oil prices and inflation while being unable to conclude the war quickly, essentially being dragged down by Iran. The situation has clearly spiraled out of control. Unless a powerful third party steps in to mediate and intervene at this point, I fear no one can accurately predict how the situation will unfold in the near future. $Invesco DB US Dollar Index Bullish Fund(UUP)$ $USD Index(USDindex.FOREX)$ We believe that as long as the Strait of Hormuz does not open as the U.S. envisions, regardless of whether the war continues, the U.S. has, to some extent, already lost. This represents another severe blow to the credibility of the U.S. dollar. The previous shock occurred when the U.S. expelled Russia from the international settlement system following the outbreak of the Russia-Ukraine war and collaborated with Europe to confiscate Russian assets in the West. This made the world realize the danger of the U.S. dollar being weaponized at any given moment. Now, we are witnessing the underlying guarantor of the dollar—the strength of the U.S. economy—gradually weakening as the petrodollar system wavers. When U.S. Treasuries, previously considered a highly stable safe-haven asset, see their yields surge and values plummet amid out-of-control inflation, who will truly continue to view dollar-denominated assets as a safe haven? I will not elaborate on the resulting macroeconomic impacts. Naturally, the U.S. dollar may experience another upward wave in the short to medium term. However, in the long run, as long as the Strait of Hormuz crisis cannot be completely resolved through U.S. strength, there is a high probability that the dollar will continue its long-term structural decline. Moving past the macro outlook, let's look at recent developments. As I previously anticipated, U.S. stocks have resumed their downward trend. The 20-day moving average of S&P 500 futures is presenting very clear technical resistance: I mentioned last time that short-term bearish positions could use the red line in the chart as a key trigger. I still stand by this assessment. Before it breaks below this level, avoid making large bets on short positions, as short-term chop and volatility may persist for a while. However, once it drops below the red support level, it may retest the 6165 level downwards. Meanwhile, we must also pay attention to the significance of the 200-day moving average. Looking at the S&P 500's previous price action, its rebound used the 200-day moving average as the inflection point for a double bottom: Can U.S. stocks initiate a new downward cycle? I believe the probability is quite high. We need to note that the price action of the "Magnificent Seven" tech stocks is broadly bearish; some have already broken below their key support levels, while others are on the verge of doing so: As you can see, META has already broken its support level $Meta Platforms, Inc.(META)$ Microsoft has broken its support level $Microsoft(MSFT)$ Nvidia has formed a massive daily head-and-shoulders top structure. Its neckline has not yet broken, but once it does, it could trigger an impulsive pullback. $Tradr 1.5X Short NVDA Daily ETF(NVDS)$ $NVIDIA(NVDA)$ The most resilient structure is Amazon, which is currently still in a range-bound consolidation but remains broadly weak: $Amazon.com(AMZN)$ Google is on the verge of breaking its support: $Alphabet(GOOG)$ $Alphabet(GOOGL)$ If Tesla continues to fall, it may also break below its support level $Tesla Motors(TSLA)$ Apple's price action is similar to Tesla's. $Apple(AAPL)$ Looking at market breadth indicators for bullish momentum, we can see that the current market is at a relatively low level. If it gets pushed down further, a new bearish trend could emerge: First, the percentage of S&P 500 components trading above their 200-day moving average has reached a relatively low level. Further downside pressure could trigger a major correction. However, if the market stabilizes here, there is also a significant chance of a reversal. Still, based on Trump's latest announcement, opportunities for short sellers seem more favorable. $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2606(ESmain)$ $Micro E-mini S&P 500 - main 2606(MESmain)$ $Cboe Volatility Index(VIX)$ $E-mini Dow Jones - main 2606(YMmain)$ $Micro E-mini Dow Jones - main 2606(MYMmain)$ $Dow Jones(.DJI)$ The examples above serve to illustrate the importance of the current red support line in the S&P 500 technical model. If it breaks and the situation does not reverse, there is a very high probability of a retracement to the 6165 level. Therefore, wait for the red line to break before cautiously scaling into light short positions. If it rallies above the red support line, simply execute a stop-loss. The current macro environment is highly volatile, and profit swings caused by news-driven whipsaws cannot be ruled out: The second opportunity is to note that XLE has dropped to a relatively neutral position: $Energy Select Sector SPDR Fund(XLE)$ Establishing long positions here offers a favorable risk-reward ratio; you can simply cut losses if it drops below the 20-day moving average. On the upside, XLE still has the potential to retest its previous highs. Alternatively, you could consider selling out-of-the-money put options below the 20-day moving average and rolling them on a weekly basis. With the geopolitical situation deteriorating rapidly, any news of a short-term U.S.-Iran ceasefire will likely be hard for the market to believe. Therefore, WTI crude oil futures prices are highly likely to climb back toward the previous high around 120. For this upward daily trend, you can capture the upside by buying near-term contracts and selling deferred contracts, creating a three-month calendar spread in crude oil futures. $Micro WTI Crude Oil - main 2605(MCLmain)$ $WTI Crude Oil - main 2605(CLmain)$ $Micro WTI Crude Oil - May 2026(MCL2605)$ $Natural Gas - main 2605(NGmain)$ Regarding gold, I mentioned last time the importance of the 20-day moving average in gold futures contracts. A bullish view must rely on breaking above the 20-day MA as a starting point. Unsurprisingly, after Trump's speech, gold reversed downwards right at its 20-day moving average: At this point, I might hesitate to chase shorts on gold and silver because their current levels are sitting at the bottom of gold's consolidation range. Chasing shorts here carries too much volatility risk. Therefore, I recommend waiting patiently for a trend reversal. Once gold breaks cleanly above its 20-day moving average, you can then consider establishing long positions. $Gold - main 2606(GCmain)$ $E-Micro Gold - main 2606(MGCmain)$ $1-Ounce Gold - main 2606(1OZmain)$ $SPDR Gold ETF(GLD)$ $Silver - main 2605(SImain)$ $E-mini Silver - main 2605(QImain)$ $iShares Silver Trust(SLV)$