To The Moon

By the 11th day of the U.S.–Iran war, markets have gone through extreme turbulence. WTI crude futures have surged in the short term from 80 dollars—a level many traders saw as a point to close positions—to nearly 120 dollars, and then, within just one day, plunged sharply back down to around 83. U.S. equity indices also tumbled quickly when the war escalated, only to stage a broad-based rebound afterward. At this point, many investors are likely asking themselves: how should we position our portfolios now? What opportunities in the market are still worth our close attention?

To figure out what opportunities in the market are really worth seizing right now, we first need to understand the macro logic that is driving current volatility.

Let’s take a look at the macro transmission chain we’re going to walk through together.

From the conclusion in the chart above, we can see that the U.S. equity market still appears to be under downside pressure. So what, exactly, is the detailed logic behind the current market moves, and where do our trading opportunities lie? Let’s walk through the macro transmission chain shown in the diagram step by step.

The apparent source of this round of market turbulence may be the renewed war in the Middle East, but in reality the shock has already penetrated into the core of global asset pricing. What global financial markets are facing now is not just an ordinary geopolitical flare‑up, but more like a full‑scale stress test around energy, inflation, interest rates, and risk appetite. Developments on the military front may produce a short‑lived “victory” on the surface, yet the economic chain reactions are spreading much deeper and could even be pushing global markets toward a new cyclical turning point.

The most direct market signal is the violent swings in oil prices. After the Middle East conflict intensified, crude prices in the Asian session at one point spiked by about 30%. Although subsequent discussions by G7 finance ministers and the International Energy Agency about releasing emergency reserves halved those gains, the impact has by no means disappeared. Taking WTI crude as an example: before the conflict broke out on February 27, prices were still at 67.30 dollars per barrel, but have since peaked at 102 dollars per barrel, suggesting the early signs of a new oil crisis are already emerging.

If price spikes are just the surface, then the change in the shape of the futures curve reveals a deeper structural issue. The crude market has entered a state of “super backwardation,” where spot prices stand far above futures prices six or even twelve months out. This means the focus of trading has shifted away from a financial game over future prices toward an intense scramble for physical supply in the here and now.

This judgment is not made in a vacuum. Just last week, Iraq began curbing production as storage tanks neared capacity; Saudi Arabia’s largest refinery was shut down after a drone attack; and Qatar’s giant LNG export facility also halted operations. This week, the UAE and Kuwait have announced production cuts, Bahrain’s only refinery has been hit, and the near‑blockade of the Strait of Hormuz has triggered a chain reaction of output reductions across Middle Eastern producers.

Against this backdrop, JPMorgan’s estimates no longer sound exaggerated. According to their calculations, just seven days after the Middle East conflict erupted, actual production cuts by Persian Gulf exporters had already reached 2 million barrels per day, and are projected to exceed 4 million barrels per day by March 13—roughly twice Iraq’s export volume. The key drivers are, first, storage tanks approaching capacity, and second, tanker capacity collapsing by 78%, with only 14 VLCCs still operating. In other words, supply, storage, and transport are all under pressure at the same time.

The risk around the Strait of Hormuz now goes beyond a traditional military blockade. Roughly 20% of global daily crude shipments move through this critical chokepoint. Even if U.S. forces announce naval escorts for tankers, the market’s fears of an Iranian blockade or Houthi attacks are still enough to keep many ships away.

This is why today’s “super backwardation” in crude is not just speculative froth, but a financial reflection of genuine physical scarcity. As the world’s largest oil exporter, Saudi Arabia pumps about 10 million barrels of crude per day and exports around 7 million barrels. With the Strait of Hormuz disrupted, Aramco can only reroute part of its flows through the Red Sea to Yanbu, but the pipelines feeding that port have limited capacity and cannot fully replace the volumes that used to go through the Strait. That means even if Saudi Arabia tries to go around, it is still difficult to ship all the crude it wants to export in the short term, and inventory pressure will keep building.

The surge in oil prices is then transmitting the shock from the energy market to the macro level. The logic chain here is very clear: the rekindling of war in the Middle East drives an oil price spike, which in turn pushes up inflation expectations and reduces market bets on Fed rate cuts, strengthens the U.S. dollar and lifts real U.S. Treasury yields, raises the opportunity cost of holding gold, and ultimately draws capital away from gold into the dollar and Treasuries. As a result, gold comes under pressure, while U.S. equity indices face valuation headwinds and the broader market weakens and trends lower.

As a gauge of longer‑term inflation expectations, the 5‑year breakeven inflation rate has in fact already risen to around 2.5%.

This result seems to suggest that the market does not expect medium‑ to long‑term inflation to spiral out of control. In our view, however, this instead reflects a more complex form of pricing taking shape: in the short term, war triggers a supply shock and sends oil prices sharply higher; but over the longer run, elevated oil prices act like a heavy tax, suppressing consumption and demand, ultimately dragging on economic growth and then pulling inflation back down once demand weakens again.

The combination of short‑term energy price increases and weak long‑term inflation expectations is, in essence, a signal that “economic growth will suffer lasting damage.” The market is not really betting on persistently runaway inflation; it is betting on a process in which a supply shock sets things in motion, but the story ultimately ends with slower growth or even recession.

Once the risk‑free rate and term premium genuinely start to rise in an uncontrolled way, equity valuations will immediately come under repricing pressure. The issue facing U.S. stocks right now is not only whether earnings will be revised down, but also that the discount rate itself has started to move higher—a development that is particularly unfavorable for richly valued assets.

At the same time, the weakening labor market makes the Federal Reserve’s position even more difficult. The latest U.S. nonfarm payrolls report was a major downside surprise: job growth in February turned negative and the unemployment rate climbed further to 4.4%. No matter which specific measure you look at, the message is the same: employment is softening, while wages and oil prices are keeping inflation pressures from fully dissipating.

This is exactly the classic shape of a “stagflation dilemma.” The Fed’s two main goals—maximum employment and price stability—are flashing red at the same time. If it cuts rates now to support jobs when oil is trading close to 100 dollars, it risks letting inflation expectations slip out of control; if it keeps rates high to restrain inflation, it will further intensify the pressure on growth. As a result, the Fed’s current policy stance effectively converges on one choice: staying on hold.

Putting all these clues together, the market’s full logic chain has actually become quite clear: the escalation of conflict in the Middle East triggers disruptions to shipping through the Strait of Hormuz, which creates a “super backwardation” in crude spot prices and rapidly turns a supply shock into an oil‑price spike; the surge in oil prices, in turn, simultaneously pushes up near‑term inflation pressure and pushes down medium‑ to long‑term growth expectations; along the way, U.S. Treasury yields rise as the term premium increases, the Fed is trapped in a policy dilemma, equity valuation foundations are loosened, and market volatility is repeatedly amplified.

It is obvious that this round of shock is far from over. The functional shutdown of the Strait of Hormuz has yet to be resolved; spot premia and volatility in crude have already exceeded levels seen during the Russia–Ukraine war; and the combination of weakening employment and rising oil prices is squeezing the Fed’s policy space from both sides. Under such a configuration, the current bout of market volatility has not yet run its course, the decline in U.S. equities may not be finished, and investors still need to stay cautious.

$纳斯达克(.IXIC)$ $NQ100指数主连 2603(NQmain)$ $微型NQ100指数主连 2603(MNQmain)$ $标普500(.SPX)$ $标普500ETF(SPY)$ $SP500指数主连 2603(ESmain)$ $微型SP500指数主连 2603(MESmain)$ $三倍做多道指30ETF-ProShares(UDOW)$ $道琼斯指数主连 2603(YMmain)$ $微型道琼斯指数主连 2603(MYMmain)$ $道琼斯(.DJI)$ $微型道琼斯指数2603(MYM2603)$

警惕局面突然反转的风险，原油破百不是难事但绝对难以维持

Strategy reference

In last Monday’s post, when the Strait was first shut, we clearly suggested going long whenever prices were below 70. As it turned out, we were fortunate: after opening higher that day, oil pulled back below 70 and the long trade worked. For those who are already long, please continue to hold. We expect a relatively quick correction in the 85–90 dollar range, but a correction does not mean a full reversal. As long as European and U.S. vessels are still unable to transit the Strait, there will continue to be opportunities to go long; using the 20‑day moving average as a stop‑loss should be sufficient. Also, be sure not to rush into shorting crude oil.

$First Trust Natural Gas ETF(FCG)$ $天然气主连 2604(NGmain)$ $美国原油ETF(USO)$ $WTI原油主连 2604(CLmain)$ $小原油主连 2604(QMmain)$

油价已经彻底失控，本周若无法回归正常全球大动荡或再起

Strategy reference:

Beyond oil prices, the performance of Japanese equities is also flashing clear warning signals, and the Nikkei often serves as a forward indicator for U.S. stocks. If the Nikkei continues to trade below 51,600, there is a risk of it sliding back toward the 42,000 area. Correspondingly, if the Nasdaq confirms a break below 23,900, there is a real possibility that it could retreat all the way back to around 17,000.

In line with the strategies we’ve used before in this community, the S&P 500’s 20‑week moving average is still one of our key monitoring indicators. At the moment, the index has already broken below its 20‑week MA, which suggests that in the short term U.S. equity indices still lean bearish. If the S&P can climb back above the 20‑week MA, we can temporarily revise this bearish stance.

What specific strategies or ideas do you have for the futures market this week, or what do you see as attractive entry opportunities? Feel free to share them in the comments section. I’ll award between 15 and 25 Tiger Coins for insightful contributions.