Hey, Ross here:
Over the weekend, it appeared that talks between our government and Iran broke down.
There is a fair chance the conflict may resume this week, which would obviously be negative for the markets.
But as today’s chart shows…
The impact could be much less pronounced than most would think.
Chart of the Day
Take a look at the chart above.
It measures the difference between dealer gamma positioning (how options dealers are forced to buy or sell stocks as the market moves) if the S&P 500 rises 5% versus if it falls 5%.
Right now, that spread is near the most extreme level ever recorded – meaning the market’s options structure is far more supportive of upside than downside.
In simple terms, dealer positioning is tilted in a way that could amplify upside moves in the S&P 500 while also softening downside moves.
In other words, if stocks start rising, that rally could feed on itself.
But if headlines out of Iran turn ugly again, the market may have a bit more cushion than most traders would expect.
Of course, this does NOT mean stocks are bulletproof.
It just means the market’s internal structure may not be as fragile as the headlines suggest.
With the U.S.-Iran talks apparently ending without a deal, many investors are naturally bracing for the worst.
But when positioning is set up this way, even genuinely bad news does not always lead to the kind of waterfall decline people fear.
So yes – renewed conflict would still be a negative.
But as today’s chart suggests, the market may be better equipped to absorb that shock than the average trader realizes.
And that leads to a question smart traders should be asking themselves right now.
Insight of the Day
The real question is – how fragile do most investors THINK the market is right now?
Because if most investors think the market is extremely fragile right now…
Then many of them are likely positioned too defensively.
They’re hedged up.
They’re underexposed.
They’re waiting for the next shoe to drop.
All these combine to create a very interesting setup.
Because when too many people are leaning the same way…
It doesn’t take much to move the market hard in the opposite direction.
That’s the recipe for rallies that feel sudden, sharp – and completely unexpected.
Tomorrow morning, I’ll share a little more on how we can target these rallies.
In the meantime, if you have a 401(k)…
Then you need to be aware of this new 401(k) trap – before it’s too late to do anything about it.
Customer Story of the Day
“I guess I have been a newbie in the stock market for years. Buying a stock and just letting it ride.
Yes, I made a little money, but after finding Ross Givens and his educational methods a few months ago, I have moved the stocks in my portfolio to ones with more potential than ever before.
I am so impressed I purchased a lifetime membership and learned a new selection method daily.”
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
