Last night, the "quiet" retreat

Source: Wall Street Intelligence Circle

High leverage, high volatility, and crowded assets being reduced at the same time is usually not a retail investor behavior.

Today, the global market will face a test:

First, yesterday’s closing was full of doubts—the logical relationships between assets suddenly broke down. Oil prices plummeted, gold, silver, and bitcoin also fell simultaneously. Such an anomaly cannot be simply explained by “US-Iran rumors.” This does not look like a “shift in risk appetite”; rather, it appears to be a “collective market deleveraging”—a “quiet” withdrawal.

Second, US stocks became “jittery.” Despite the sharp drop in oil prices and falling US bond yields, the US stock market barely went up.

1) The gains at the close relied entirely on a late-session rally.

2) This time, the Dow's increase was greater than that of the S&P 500 Index and the Nasdaq Index, indicating that funds seem to be retreating from the overly crowded AI and tech giants. When the outlook is unclear, the safest move is to pull money out of the most expensive, crowded AI tech stocks and put it into dividend-paying, cash flow-generating, low-valuation blue chips in the Dow.

Third, oil prices behaved even more abnormally. They plunged on rumors but did not recover after those rumors were denied. The fact that prices didn’t rebound after the clarification shows that shorts were not acting purely based on “rumors,” but rather using the “rumors” (taking advantage of the chaos) as a cover to take profits and make a defensive retreat.

Iran’s state television reported that a draft memorandum of understanding shows that the US military will lift the maritime blockade and withdraw from the waters around Iran, but so far, no agreement has been reached. The report said Iran will resume traffic through the Strait of Hormuz; if this coincides with the US lifting the blockade, a large amount of crude oil supply could quickly return to the oil market.

The White House’s Rapid Response account posted on X, stating that the unofficial draft of the Iran-US temporary peace agreement reported by Iran’s state television is “completely fabricated” and “not true.”

Fourth, US futures opened lower today, putting pressure on Asian stock markets. Keep a close eye on the VIX today. If stocks fall but the VIX reacts tepidly, it suggests that the main activity right now is institutional investors gradually rebalancing; if the VIX surges sharply, be careful (the market is starting to buy protection).