US Launches Operation Epic Fury on Iran - How Will Markets React?

 

US Israel Launch Attack on Iran timesnownews.com

Over the weekend: US launched Operation Epic Fury against Iran, with the help of Israel:

• $VIX (fear gauge) has been riding high for weeks.

• Crude Oil has been on a tear touching a new recent high on Friday.

• Gold still clinging to  $5000 (closing above $5250) like Trump owes it money

My only question on the situation is, what took so long? Iran has been a thorn in our side since the the Shah of Iran fled to the United States in October 1979 after being overthrown during the Iranian Revolution. He sought medical treatment for cancer, but his arrival contributed to the storming of the U.S. Embassy in Tehran shortly thereafter. Of course after having just wrapped up the highly unpopular Vietnam war, America was in no mood to go to war again, and Jimmy Carter was weaker than Joe Biden in a foot race.

In Trump's video address Saturday:

“We are going to destroy their missiles and raze their missile industry to the ground, It will be totally obliterated” the president said. “We are going to annihilate their navy, we are going to ensure that the region’s terrorist proxies can no longer destabilize the region and the world.” (many sources) 

"The lives of courageous American heroes may be lost and we may have casualties. That often happens in war."

Markets don't like uncertainty, and this action certainly removes the what if factor. Of course the leftist msm will root for Iran, we already see them front running the story with reports that Iran is retaliating. Iran would be smart to surrender immediately. 

How Will Markets React 

• The unwind of the defensive sector rotation
• Possible spike on the $VIX overnight Sunday Futures followed by an unwind of the fear trade. 
• We may see a knee jerk reaction in Sunday futures trading, and a spike in Gold, but I think we could see a rally in US equities. This geopolitical clarity could be the catalyst the market needs to shake off the lingering AI fear trade, and pull cash off the sidelines, sparking risk-on sentiment. 

March comes in like a lion, and out like a lamb 

  

NVIDIA Earnings Fail To Impress Mixed Markets

Like it or not: US BIG TECH REMAINS IN THE PENALTY BOX 

That message could not have been made more perfectly clear than it was when the bottom dropped out on NVIDIA, at yesterday's opening bell. 

$NVDA had already rallied off the Feb. low - up nearly +20%, It continued to rally on Wed. Even popped another 3% in after hours trading. Earnings were blowout, as expected, yet it wasn't until yesterday's open where the trap door sprung open. 

NVIDIA $NVDA gives back most of yesterday's gains, but still 10% of the Feb. lows pic.twitter.com/MkTNmAl7cY

— Veteran Market Timer (@3Xtraders) February 26, 2026

This was one of those rare instances, where whatever you thought we were seeing in the after hours market didn't count, and what followed was more sideways slop, on mixed markets. 

Markets mixed again - different day same slop - Mag7 #NDX $SPX $SOX lower. Financials, Transports, consumer service stocks, energy, higher pic.twitter.com/v0my0ZuWjk

— Veteran Market Timer (@3Xtraders) February 26, 2026

Some sectors ended higher, some lower, but as long as money continues to hide in Gold, and other alt trades, while money continues to flee the US for every other part of the world; Europe, Japan, S. Korea; I'm happy to watch from the sideline, and after 4 months of this shit, I'm getting really good at it. 

We covered the $VIX action extensively a couple days ago [link], and then I see CNBC Fast Money - last night's show - doing a deep dive on the subject. I'm not accusing them of plagiarism, I think everyone is looking at the $VIX under a microscope. They even went so far as to bring on guest - all the way from Japan - to try to tell investors that a relatively new indicator called, "the $VIXEQ (Cboe S&P 500 Constituent Volatility Index) - sold as a single stock indicator - is comparatively "not so high". More smoke and mirrors. Take a look for yourself, and decide if volatility is low. Spoiler, that particular fear gauge has been trending higher since Christmas Eve - the same date where they sold tech in 2025. Is this program selling? I don't know.   

Yoshiko Yamaguchi CFA Screenshot

INVESTMENT CAPITAL CONTINUES TO FLEE THE US 

The bull parade (perma-bulls) on the TV continues as money managers from BofA to [blank] continue to insist that the idea that money is fleeing the US, is "hogwash", yet nobody can deny that Europe and Asia have out-performed US markets by some 40%. Momentum is an aphrodisiac, to investors.   
Add to this the fear that AI is about to take your cushy Wall Street Analyst job, and you have the perfect motive to go on TV and lie your ass off.    

Sure, the globalists, and the socialists continue to prefer ROW, but that's not the only reason the $SPX remains trapped in purgatory - trading at the same levels it was back in Oct. '25.  The NASDAQ (what most young people are heavily invested in) is actually trading below the October highs. I trade in and out of this tech heavy sector, because this is the only sector that matters. Sure you could trade a snapback rally in beaten up software cloud names, or even chase the stealth bull market in semis, but you risk falling through the next trap door. $SOX -3% - after eking out a slightly new high? No thanks! The weather in Chicago is forecast to be spring like, and I plan to take full advantage of it. 

As for NVIDIA, last I checked it was being bought at the 50 day SMA. That's the level to watch, but after yesterdays action, I think there's a great possibility that we're about to see another shakeout. 

Take Care, AA 

Where AI Software-mageddon Meets SPX Sideways Slop: $VIX 19 - Should You Trust It?

The $VIX continues to keep traders on edge, and the buying algos at bay:  

This is the first time since late Sept. '25 we've seen the $VIX get above the 50 day ma for more than 2 weeks, and stay there. Looks like we're on track for a weak close. 🎉

— Veteran Market Timer (@3Xtraders) February 19, 2026

Monday was another bloody session, with the selling spilling over into several sectors. Took 2-3 days to pinpoint the catalyst, and the story just gets interestiner, and interestinger—FOCUS:  

• Software-mageddon? 
• Trump tariff chaos? 
• Private Credit - yeah thanks Jamie Dimon for the Tuesday Morning Quarterback!    
• Monday's Plot Twist: A futuristic fable written by a couple of shady-looking macro-fund managers in a Manhattan high-rise. Citrini Research’s “2028 Global Intelligence Crisis” memo — framed as pure "scenario, not prediction" — hit X like a viral contagion Sunday night and suddenly everyone was piling on the AI doomsday machine psyop theater [Citriani's AI doom report scares investors]. 

• Who/What really led the global correction? The same canary in the coalmine I've been sounding the alarm on for months - Japan - mic drop     

• The 5 reasons behind Monday’s global stock market rout yahoo finance/ fortune 

Pretty much no trades are working including the hysterically hyped "Broadening Out" trade.    

Hammering a few more nails in the "broadening out" (economy) theory coffin: The Economy isn't in good shape. Cloud -5%, Airlines -3%, Generative AI $CHAT - 3.86%, $SPX Insurance sector -2%, Retail sector -2%. $TRAN too! 

— Veteran Market Timer (@3Xtraders) February 23, 2026 

BOOM: Who appears on my screen again this morning, but perma-clown Julian Emanuel trying to sell us on the idea that the $VIX is overbought, and that options traders are contrarians (which they certainly are), but one thing I've learned over the years it to NEVER ARGUE WITH THE TAPE.   
Granted: The $VIX Isn't Too Convincing

$VIX hits 20 again - It's become a mid-morning ritual. The tech heavy $SPX plummets

— Veteran Market Timer (@3Xtraders) February 23, 2026

With NVIDIA Earnings After The Bell I wouldn't be hanging my hat on that peg, after the trend we've seen - tech stocks being taken down on one AI fear, or another, over the past few months. 

The market should be afraid, very afraid - it's not (and that's a red flag) 

 Buy the dip, sell the rip continues to provide some comic relief, and good gains for those who can stomach the volatility, but after 3 weeks of this sideways slop is getting to feel like Groundhog Day the movie  
Feels like any other bear trap: $VIX poking it's head just above 20, for just long enough to suck in a few  more retail bears, but something doesn't feel right, and nobody can deny that there is some panic in the software, and private credit markets, and that panic could still spill over into other sectors - yet I still give that a low probability.  
Caution advised 

P.S. I said no trade is working, but the buy the dip sell the rip trade has actually has been working really well, if you are able to crack the code on it. Never give up! 

Adding More Nails to the Broadening Out Economy Coffin

Quick Update: Markets remain pretty lame (slow) especially for $VIX 20, but hey, at least we've got impending US-Iran fireworks to distract from the real show: Bloomberg is seen flipping bearish again as Trump preps for "war", pushing $100 Crude Oil (fear porn). Look, I get it: the Chinese get their oil from Iran, and that upsets the China-lovin' crew at Bloomberg.
Meanwhile, I'd like to blow some more holes in the "broadening out" psyop being pushed by the dishonest mainstream media, they've been pushing for, going on 3 months now. The broadening out narrative is nothing new; it's a retread recovery narrative, as we covered back in Dec. '25 [link to post].
Trump bears – including most of Europe – continue to sell (short) US markets. Highlighting yesterday's pinned tweet, absolute gold, if I do say so myself. See the $SPY chart annotations. 

Apparently "Pivot From the US" was misinterpreted as "Short US tech", and I personally can't wait to see how this plan turns out! Yes, I'm still net long, even after the rally of the past 3 days. 
I don't watch much CNBC anymore, but it's been slow, and I get bored watching a weak tape... Yesterday I happened to catch the midday crew encouraging AI panicans to pile into boring consumer staples like Walmart, Costco, etc. Of course, this is a continuation of the "broadening out" lie we've been fed over the past month or two, and here's why they chose
 $WMT:

• Consumer Staple - household name - even the rich are forced to shop this turd thanks to double-digit inflation during the Biden years
• Megacap - moves markets like a Mag7 name
• Dow component #24 (Dow 50k should ring a bell)

Nipped that in the bud: 

Famously overbought Walmart is dumped, ahead of earnings $WMT #BagHolders #CNBC #Traders https://t.co/LqnoEm3JSG

— Veteran Market Timer (@3Xtraders) February 19, 2026

The Playbook Hasn't Changed
In fact, Christopher Verrone just came on Bloomberg, called out the defensive trade—hiding in cyclicals  - specifically mentioned utilities—as a "knife's edge": Translation: The sector rotation may have reached an end.
Take Care, AA