URGENT: IRAN LAUNCHES SURPRISE ATTACK CRASHING MARKETS!
In a Nutshell
Markets crashed in aftermarket trading on unconfirmed Middle East escalation, with oil spiking and major tech names like SanDisk and Micron plunging 7-12% in minutes. Meta faces its worst losing streak in years amid $145B AI spending and a $1.4T lawsuit, while FOMC and big tech earnings tomorrow could drive further volatility. Short-term traders are advised to avoid overnight shorts, with only experienced risk managers positioned for potential continued downside.
These notes were generated by AI and may contain inaccuracies.
Markets began to freefall unexpectedly during aftermarket hours, disrupting what had been an amazing recovery into the close. NASDAQ broke its ascending uptrend pattern support, moving from highs of nearly 678 to lows of 671 within 30-40 minutes, representing a 1% loss. SanDisk fell from 1,139 to lows of 1,023, losing 10% in 30 minutes. Micron dropped from around 833 to lows of 770, losing 7-12% in minutes despite being up 1.5% earlier in aftermarket hours.
Oil-related instruments showed dramatic moves with United States oil fund up 5.37%, WTI up 1.89%, while SCO (inverse oil) was down 6.3% and Oil U up 4%. This combination of oil rising while overall markets decline indicates escalation in the Middle East that has not yet been officially announced. The timing is significant as it occurs the day before big tech earnings reports.
Meta is experiencing its longest losing streak ever with eight straight days of declines. Multiple negative factors are converging: expected first negative free cash flow print, AI capex running at $145 billion annually, and a lawsuit seeking $1.4 trillion (nearly its entire market cap) going to trial next month. This represents the first time in over five years that Meta has seen a double-digit red streak in daily candles, currently on day nine.
Michael Burry has performed well during this period, but individual investors cannot tolerate the same level of pain. Chip stocks have already experienced significant drawdowns, with SanDisk losing over 50% of its value in recent weeks. Markets tend to be more bullish than bearish overall, making short positions at oversold levels risky as they could miss major bull runs.
Day traders are opening short positions and closing by end of day, while overnight shorts carry additional risk. Markets are irrational and can recover as quickly as they sell off. The Federal Reserve's FOMC rate decision tomorrow has a 70% chance for a pause and 30% chance for a possible rate hike, which could drive markets lower if a hike is announced.
Meta and Microsoft report earnings tomorrow, along with Robinhood. Even after beating earnings last quarter, Meta experienced an 8% drawdown. Meta's P/E ratio is low based on fundamentals, but negative free cash flow would make valuation difficult. Microsoft also sold off after strong earnings last quarter. AI overspending represents the central bet these companies are making.
Only experienced traders with proper risk management should consider shorting markets currently. Beginners should avoid short positions as oversold conditions mean direction can quickly turn against them. Position sizing should remain conservative given potential for further drawdowns, with the understanding that investors are in markets for the long haul.
FOMC rate decision, Microsoft earnings, and Meta earnings will provide significant market clarity. Live streaming coverage is planned for all events. LPP team membership includes daily live trading sessions, private group chat, and A2Z video lesson library, currently available at discounted pricing of $299 off due to market conditions.
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