Cestrian Daily Market Report: Does Iran Matter?
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Analysis by Alex King, CEO, Cestrian Capital Research, Inc.
Stock boards today are awash with bullish expectation for equities due to the absence of any elevated aggression in Iran or the wider Gulf area.
This may be the case but I would not assume it’s the case. Markets have gotten themselves into worry mode at present; bond yields are at the pain point (we said so Friday, here), the Nasdaq is behaving as if the AI boom was busted already, and crypto remains subdued. On the other hand, this misery has reportedly created more short exposure in the S&P500 than at any time in the last decade; rocket fuel to the upside if the landscape changes.
Which way will everything go? Well, I don’t know of course, but you can use the charts we publish in this Daily Market Note each and every single trading day to work out your preferred positioning in stocks, bonds, gold, crypto, sectors, international stocks, and oil of course.
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US Government Bond Outlook
Retreated a little during Friday, presumably as news of non-escalation rippled across the market.
Longer-Term Treasury Bonds (TLT / TMF)
Look, bonds are on the floor but personally … I think this is a bullish setup. Do you really think Warsh is going to hike? I do not. Is it likely that yields stay up here at the pain level? I don’t think so. If I’m wrong and TLT sells off from here, you can use a proximate stop a little below $80 to save you from any major losses; if TLT does nothing, you’re getting paid >4.5% to own it; and if I’m right and TLT rises, you’ll also be getting paid to own it as well as the stock rising.
25Yr Zero-Coupon UST ETF - ZROZ
Lot of accumulation down here.
Disclosure: I am long $ZROZ.
Commodities Outlook
Gold
Just about holding over the 8-day SMA; headed upwards, I think.
Disclosure: I am long $MAI and long $GLD.
Oil (USO / WTI / UCO)
As everyone knows, oil “should” be climbing more than this, but isn’t. A whole lot of people are getting very bent out of shape about this and I truly don’t know why. Oil is just a chart like any other chart. Let the chart tell you what price is doing and where it may be headed; trying to extrapolate from your own perception of reality to where price “should” be seems a very difficult way to make a living if you ask me.
2x Levered Long (UCO) / Short (SCO)
Note - Leveraged ETFs. Read the fund documentation if you are considering using these instruments.
Disclosure: I am long $OBE, and $JOY.TO
Crypto Outlook
Bitcoin
The $56k level has held well as support during recent weakness. There is a lot of frustration rolling around the market at present re. the Clarity Act. My assumption is that the Clarity Act passing would be bullish for Bitcoin and Ether, since it legitimizes both and I would expect that to lead to a larger addressable market.
Ether
Pretty much straight up since 26 June. Should this continue I would expect resistance at the intersection with the 200-day SMA - currently $2140, lower obviously by the time any test happens.
Disclosure: I am long $ETHA, $ETHT, $SBET, $BMNR.
US Equities Outlook
Equity Volatility
The Vix remains muted.
Disclosure: Long Vix $17 strike calls for December.
S&P500 / SPY / UPRO
July has been a nothingburger in the SPX; the pain has lain elsewhere.
Friday was a stronger day than it “should” have been. A higher low, and green on the day.
3x Levered Long / Short ETF - UPRO, SPXU
Note - Leveraged ETF. Read the fund documentation if you are considering using this instrument.
UPRO mirroring SPY quite closely, leverage notwithstanding.
Nasdaq-100 / QQQ / TQQQ
This is where the pain has been. A fakeout new high in June and then July has sold off in fits and starts, almost back to the May lows now.
See, more weakness Friday; broke that support level.
Levered Nasdaq - TQQQ Long / SQQQ Short
Note - Leveraged ETFs. Read the fund documentation if you are considering using these instruments.
I would be surprised if the 200-day SMA at $60 gave way in TQQQ.
Dow Jones / DIA / UDOW
The 50-day is holding.
3x Levered Dow - UDOW Long / SDOW Short
Note - Leveraged ETFs. Read the fund documentation if you are considering using these instruments.
Disclosure - I am long $SDOW, with a stop that will execute should the Dow make a new ATH.
Sector Rotation
If you’ve been in pain in equities recently - you’re in the wrong sectors. Look beyond tech; there is always a bull market in one sector or another. Here’s financials (XLF) and biotech (XBI), both doing well.
You can use a sector rotation strategy manually, or you can use our easy-to-use signal service instead. Read about it here.
Disclosure: I am long sector ETFs in accordance with our SignalFlow Sector Rotation Algo.
International Equity Indices
I may not know much, but I know a higher low when I see one, and that is a higher low in $EWY. If South Korea bounces so too will semiconductor.
If you want to take advantage of international markets, take a look at our global ETF rotation service, here.
DISCLOSURE - I’m long country ETFs per our SignalFlow Global service.
Alex King, Cestrian Capital Research, Inc - 26 July 2026.