Iran and the Stock Market

The current situation in Iran is captivating the markets currently and will likely do until the British Military personnel are released.It seems to have been a blatant negotiation tactic on the part of Iran , with the news today that they have sent a letter to the British Government telling them to withdraw their troops from Iraq.

Since the likelihood of this is less than zero we will no doubt see some more posturing over the coming days on both sides .Ultimately I believe that Iran will release the hostages,but they may hold on a lot longer than people are currently speculating.

The impact of this is that Crude Oil has shot up in the last few days and in fact yesterday when there was a rumour of some confrontation it shot up $5 in seven minutes.The likelihood is that Crude could hit over $70 again in the near term if this standoff continues.If it only lasts a short time then it is unlikely to have a major impact on any economies, however what is more important is the perception that may be created of increased risk in the markets.

I personally am still nervous about taking any major positions one way or another until the mid term direction becomes a bit clearer.If I was pressed I would probably favour another pullback but to be honest it could go either way, hence my reluctance to make any major moves.

I am still looking for opportunities to take profits where I can and lighten up my exposure.I am also still holding my protective puts in QQQQ and SPY.I would hold these for another month or so unless we get a major move , then I may look to roll them further out.

Quite often the smart move is to do nothing and wait and see-I feel that this is one of those times.

Best Wishes

Alan

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