War Is... Not Bearish

Stocks tend to rise during war… [Jeff Clark's Market Minute]( War Is… Not Bearish By Jeff Clark, editor, Market Minute War is hell. War is brutal. It is devastating. It is bloody. War can be described by any number of negative adjectives. But, the one thing war is most assuredly not is bearish. War is bullish for stock prices. Oh sure, stocks typically decline in anticipation of military conflict. But, as soon as the bombs start dropping, stocks start rising. And, the duration of that rise tends to correlate to the length of the anticipatory decline that preceded it. For example, back in 1990, stocks fell hard following Iraq’s invasion of Kuwait. Investors anticipated the United States entering the conflict. And, the S&P 500 fell from 360 in August 1990, to 310 five months later. Recommended Link [Next President (Not Trump. Not Biden.)]( [image]( Do you want to see who I believe will be the next president of the U.S.A? It won’t be Biden… And it won’t be Trump. [Click here to see why it will be _____________.]( -- Once Operation Desert Storm started on January 17, 1991, stocks rocketed higher. The S&P 500 was trading at 390 five months later. The index recovered everything it lost during the five months investors were anticipating war, plus an additional 8%. Here’s a chart of how things played out back then… [(Click here to expand image)]( The current situation is a bit different… Investors had just one day to anticipate Iran’s attack on Israel. We started hearing rumors of an attack on Thursday afternoon. In response, stocks gapped lower on Friday. And, the intensity of the selling pressure increased throughout the day as those rumors persisted. The S&P 500 tested its 50-day moving average line as support for the first time in five months, and the index finished the day down 75 points. The financial markets were closed when the missile attack started over the weekend. Many investors were surprised when the stock market gapped higher on Monday morning. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. But, to the extent that Friday’s decline was in anticipation of military conflict, yesterday morning’s bounce was to be expected. Since it was just a one-day, 75-point decline in the S&P 500 heading into the conflict, bullish investors shouldn’t expect much more than a one- or two-day, 75-point bounce. That will bring the index back up to the 5200 level that had been support for much of the past month. It is now resistance. And, for many of the bearish reasons we’ve talked about in previous essays, that resistance is likely to hold and stocks will head lower again. That is, unless missiles start flying. In that case, stocks could be headed to all-time highs. After all, war is bullish. Best regards and good trading, [Signature] Jeff Clark Editor, Market Minute [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](