TOP 5 STOCKS TO WATCH AS IRAN WAR CONTINUES...
In a Nutshell
Markets are volatile amid US-Iran conflict over the Strait of Hormuz, with oil surging 5%+ and futures down as semiconductor stocks like SanDisk, Micron, and Intel lead declines. Trump is expected to tweet market reassurance before Monday's open, creating likely recovery bounces despite the geopolitical risk. Key levels to watch: NASDAQ at 720 support, oil direction for escalation signals, and whether semis break lower toward 5-15% further downside before potential entries.
These notes were generated by AI and may contain inaccuracies.
Markets are getting volatile following weekend escalations between the US and Iran. The session is taking place Sunday, July 12th at 6:05 p.m. Arizona time with NASDAQ overnight hours officially open. The speaker provides an update on developments in the Strait of Hormuz region where conflicting reports are emerging about whether the waterway remains open or closed.
The US Central Command stated the Strait of Hormuz is open to all vessels seeking to lawfully transit in international waters. However, a source from Iran's IRGC claims that in the past two hours, Iranian forces fired at several US vessels attempting to approach Iran's shore along with two rogue commercial vessels. The source states the Strait of Hormuz is now completely closed off to all routes and will not reopen in the medium term, with attacks expected to expand and conflict to deepen.
US media and official sources maintain the strait remains open but is being guided by US vessels. The speaker interprets this as the US attempting to maintain flow of oil with force to prevent oil prices from rising too high and creating further market shock.
The speaker addresses speculation from earlier videos about a potential attack that supposedly killed three American service members. After investigation, there are zero reports of US service member deaths or injuries in the region, and all personnel are accounted for. The speaker wanted to clarify this point because it would represent a very serious escalation.
Brent crude oil is up 4.5% following the US and Iran resuming war. On the 4-hour timeframe, oil experienced a sharp correction to lows of 31 before recovering. As of the current moment, oil is up 5.22% during overnight hours, moving from lows of 30 back up to 36. This represents approximately 20% ROI for those who bought the dip, though not everyone captured the full move from lows to highs.
If markets continue to drop and the war escalates with the Strait of Hormuz closing, oil prices are likely to continue rising. The speaker notes there is significant back-and-forth about what is actually happening with the strait.
Overall futures are all in the red since opening approximately one hour and 19 minutes prior. The NASDAQ is down about 78 points and is approaching the same lows from Friday. Semiconductor stocks are seeing notable declines including SanDisk down 3.3%, Micron down 2.5% to lows of 250, and Intel down 1.5%. PLTR, Microsoft, and Apple are showing more resilience with Apple down only half a percent.
The speaker observes that the most overvalued and irrational stocks tend to crash the hardest during these periods.
A consistent pattern has emerged where Trump tends to tweet market reassurance by the time markets open on Monday, either tonight or in the morning. Markets typically respond positively to this reassurance even when the underlying situation may not justify optimism. Markets will most likely attempt to recover right at the open.
For the past 10 to 14 weeks, if there is no ceasefire and attacks resume, markets should prepare for a solid pullback. The NASDAQ has been consolidating with very little progress, no break of structure, and no break of pattern, maintaining a technically bullish setup but with significant downside potential if escalations rise.
The speaker outlines three main areas to monitor:
- Direction of overall markets (NASDAQ and S&P 500) to determine whether buying the dip makes sense or caution is warranted
- Oil prices as an indicator of whether the situation is escalating, which helps determine whether to go long or stay away
- Semiconductor stocks which are getting hit hard; continued weakness could lead to markets dropping another 5-10-15%, potentially presenting better entry points for these stocks
Earnings week resumes with Netflix scheduled to report earnings on Friday after markets close. This adds another catalyst variable that could push markets higher or lower.
The speaker has sent an announcement to the LPP team noting that markets have always recovered in an irrational way when selling off due to geopolitical news. Trump typically sends a tweet creating buying pressure and hope, followed by recoveries. Those who are up on short positions should consider locking in profits during overnight hours if they see potential for recovery, as holding shorts through a recovery means giving back gains.
Tesla is consolidating between highs around 440 and lows around 370-380, currently trading in the middle ground. The speaker is not a fan of Tesla stock despite owning Tesla vehicles. At current levels, Tesla trades at approximately 400 times earnings with revenue not growing and net income not growing since 2023. Fair value analysts indicate 30% downside.
The speaker would only trade Tesla at extreme overbought or oversold levels, not at current middle-ground valuations where upside potential roughly equals downside risk. Short entries would be considered near 430-440 with small initial positions, adding more when direction becomes favorable. Long entries would wait for actual deals in the 370-380 range.
SanDisk is discussed in context of Michael Burry's commentary on X about semiconductor uncertainty. The speaker agrees with Burry's points but notes that markets often stay irrational longer than expected. At current levels around 2,000, the stock is finding resistance after previously treating 2,000 as support. Breaking below current support around 1,800 could lead to a retest of 1,500.
Fundamentally, SanDisk trades at 63 times earnings with 4.5 billion in revenue and 13 billion market cap. The speaker is not afraid to invest but is not being super aggressive. If SanDisk breaks above 2,000, it could continue running as markets recover. Breaking support at 1,800 would suggest potential retest of 1,500.
The speaker advises against beginners attempting to short SanDisk given its run from 400 to 2,400 in three to four months.
MicroStrategy is oversold with Bitcoin attempting to recover. The speaker believes it does not make sense for beginners to short MSTR when recovery potential is technically much greater than downside potential, as long as Bitcoin holds above 60,000. Recovery targets could reach 120, 130, 140, or even 200 if Bitcoin rallies. The speaker does not like MicroStrategy or Bitcoin but respects market dynamics when risk outweighs reward.
No one who bought SpaceX at its $150 IPO price has made money. The speaker notes this is a momentum-based play and IPO statistics show that hype fades, uncertainty presents, and corrections follow. OpenAI is reportedly not confident in IPOing this year due to SpaceX's performance.
SpaceX is viewed as too expensive despite admiration for Elon Musk's achievements. The company still loses billions of dollars annually. In uncertain market conditions with rising inflation and weak labor market, space travel is not seen as a priority that justifies paying a premium. The speaker believes SpaceX will not sustain elevated levels if overall markets begin to correct.
The speaker does not see Mars colonization happening in their lifetime and does not value space exploration enough to invest during uncertain times when more fundamental earthly concerns exist.
NASDAQ (QQQ) is testing 720, a major support range. Breaking below this support could lead to a difficult Monday session if Trump does not provide market reassurance. Micron has reached new lows at 948, below Friday's levels.
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