Iran Closing Strait of Hormuz | Stock Market Emergency Update
In a Nutshell
Markets opened with an initial rally that quickly reversed amid news of Iran threatening to close the Strait of Hormuz if the US strikes again, driving oil prices higher and sending tech stocks lower. Traders captured short opportunities on overbought reversals in names like MU and Dell, but are now monitoring oversold levels for potential long entries while remaining cautious due to 29-35% retracements already seen in semiconductors. Risk management is emphasized: position sizing must stay tight, overnight shorts are risky given potential Trump tweets, and exits are advised once expected 3-4% gains turn into potential 5-10% losses.
These notes were generated by AI and may contain inaccuracies.
NASDAQ opened down 0.88% as of 2.5 hours into the trading session on July 8th. Markets gapped up immediately at the open before reversing. The live trading session with the LPP team focused on understanding the news and recognizing the rally as short-lived, which enabled capturing an overbought reversal. NASDAQ retraced from highs of 709 back to lows of 700.
MU Micron rallied to nearly 960 before selling off to 915, representing a 4% drop. Dell was identified by a team member during its upward move and subsequently corrected fully back to pre-market lows with a 7.6% decline. Positions were entered after confirmation of the overbought reversal and added to as the short direction became favorable.
Micron was played conservatively once it reached oversold levels. The speaker is monitoring these oversold levels for potential long entries, noting that semiconductor stocks have previously traded at 1,120 levels and are expected to return there. Current uncertainty stems from breaking news regarding Iran.
Iran announced it will fully close the Strait of Hormuz to all Mediterranean traffic as soon as the US attacks, having adopted a new military and strategic doctrine over the past 48 hours. Trump stated the US will strike Iran again that night, meaning the strait closure could occur within hours. Oil prices are already surging and markets are dropping on the uncertainty. The speaker notes that even irrational gap-up attempts are likely to fail if Middle East tensions continue to escalate.
Most big tech stocks are in the red. The South Korean KOSPI index is down 10% over two days following Samsung's earnings report. Trump stated negotiations are over, calling the other side "scums" and "liars" and declaring it a waste of time to continue talking.
Markets are structurally more bullish than bearish, and Trump has historically shifted positions quickly, requiring caution with aggressive short positions. Intraday shorts are acceptable, but carrying shorts overnight carries greater risk due to potential market-moving tweets. Micron has already declined approximately 29% from highs near 1300, with some stocks seeing 30-35% retracements, warranting increased caution at current levels.
Markets gapped up at the open with no fundamental reason, demonstrating their capacity for irrational bullish behavior. Position sizing and exposure must be monitored carefully. When progress stalls on either long or short positions, exiting is recommended. Losing 1-2% is preferable to holding into 5-10% losses. The speaker emphasizes that when expected gains of 3-4% turn into potential 5-10% losses, risk outweighs opportunity and positions should be closed.
Further market movements are expected and require continued monitoring, particularly for any Trump tweets. The speaker conducts live trading sessions every morning at market open. LPP is the only service offered; no trading is done for clients, and the speaker never initiates contact first via social media or messaging platforms. Fake accounts exist across Discord, email, Instagram, YouTube, and Twitter.
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