There is no winning the situation that we are in. All paths lead to destruction and you can't prove me wrong. The market will take the mother of all shits and it isn't wearing a diaper.
No this is not clickbait, and this is not political. I don't care who you voted for.
What am I saying? First look at the recent spike in the markets. What turned things around?
It was the fake ceasefire. Trump pretended that we virtually won the war already and we're getting some kind of deal. The markets then rode on a wave of unbridled boomer optimism. And I know if you spend time on Reddit you won't think so, but there are still old people with money who think a US victory is imminent or inevitable. Look at the comment section in SeekingAlpha and you'll see what I mean.
The only problem with this rally is that there is no positive outcome possible with this conflict. It's heads we lose and tails we lose worse.
Option #1: Get a deal now
That means kiss Iran's ass and give them what they want. It means leaving the Gulf States high and dry and saying bye-bye to the petrodollar. The same exuberance that brought the markets up will be reversed to bring them down. "USA lose, USA weak, me no invest in US market now". Suez Canal moment but for America, end of perceived global empire, investment drops off a cliff / goes abroad. Sell America trade on steroids.
Option #2: Military victory
A long, drawn out war in inhospitable terrain paid for by an already broke nation. Remember the Iraq war and how short that war was supposed to be, but wasn't? Now it involves the strait of Hormuz being closed for much of that time, which is a whole new dimension to it. It would be a global depression.
Option #3: There is no option 3. You killed their beloved leader and pissed all over their country. They aren't willing to compromise with you. They either get a favorable agreement or lose in all out war.
Conclusion: Boomer optimism won't survive either path forward. The reality will be too crushing to ignore. Prepare for the greatest rug pull in history.
Positions: Put options on QQQ, XLK, XLF. Calls on oil.