By Nigam Arora
President Trump acted where his two immediate predecessors, presidents Obama and Bush, apparently punted by killing Iranian Gen. Qassem Soleimani.
After Soleimani was killed and the stock market was falling, I said his death may not be as significant for the stock market as it seems. Now Iran has retaliated by shooting missiles on bases in Iraq where American soldiers are stationed.
Let’s figure out what is next for investors in the stock market with the help of three charts.
Please click here for an annotated 25-year chart of S&P 500 ETF /zigman2/quotes/209901640/composite SPY +1.60% , which tracks the benchmark S&P 500 Index /zigman2/quotes/210599714/realtime SPX +1.59% .
For the sake of transparency, the second and third charts have been previously published and no changes have been made.
Note the following:
• Since most investors watch the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.42% , it is worth noting that so far there has not been a significant move in the Dow.
• The first chart shows a big spike in oil when the news of retaliation by Iran hit.
• The first chart shows the volatility in oil near the highs when smart investors started to speculate that Iran did not want war as the retaliation was measured.
• The chart shows oil falling as latecomers figured out that Iran did not want war.
• The chart shows that oil took another leg down when there was no immediate U.S. retaliation.
• The first chart shows that oil broke support on speculation that Trump will let this pass and de-escalate the situation. In plain English, oil is lower as of this writing compared to where it was before Iranian retaliation.