One week ago, I called the situation in the Strait of Hormuz a Category 5 hurricane. Since then, the storm hasn’t just stayed on the radar. It has effectively stalled over the global economy, strengthening its grip and rewriting the rules of the road for every asset class. At least for now.
I think this is overblown — not unimportant, but overblown. Because the markets have many issues to battle outside of this one. That’s what leads me to believe that moves like Tuesday’s afternoon jump higher in major stock indexes are more likely a fake out than a breakout. Let’s look at the charts, then discuss the competing narratives.
