Stock Market Prep – Israel-Iran Conflict and Inflation Worries

Last week saw a sell-off as investors panicked over inflation data and increasing tensions between Israel and Iran. This week the worries continue.

Over the weekend, Iran attacked Israel and cryptocurrencies plummeted, with many cryptos down over 20% within hours. They recovered a little though, and now that futures are open, things are stabilizing. But with Israel threatening to retaliate against Iran, we could see another downturn in the market at any moment.

For a full analysis of how the Israel-Iran conflict will affect the stock market, make sure to watch this video:

Last Week Recap

Last week was filled with bad economic news, which ultimately sent the DOW down 2.3%, the S&P 500 down 1.5%, the Nasdaq down 0.5%, and the Russell 2000 down 2.8%. The Russell 2000 has now given back all of its gains for the year, and the DOW is close to doing so also.

It started Monday with the New York Fed consumer survey showing expectations for rent increases rising dramatically to 8.7%. On Tuesday, the National Federation of Independent Business showed that optimism among its members hit an 11 year low.

Then Wednesday was the nail in the coffin when the Consumer Price Index (CPI) for March came in at 3.5%, which was much higher than expected. Supercore CPI, which the Fed is now closely monitoring, came in at 4.8% – the highest in 11 months. Thursday’s Producer Price Index (PPI) showed wholesale prices rising at the fastest pace in 11 months also.

Then Friday was the real drop in the markets. One report showed import prices rose more than expected in March, and notched the largest three-month advance since May of 2022. But what really sent the markets falling were the bank earnings, and especially the inflation warning from Jamie Dimon, the CEO of the largest bank in America.

The market also sold off on Friday over news that Iran was going to attack Israel. Investors feared escalating tensions in the middle east would send oil prices higher, accelerate inflation, delay Federal Reserve rate cuts, and cause stock prices to fall.

Market Sentiment

The CNN Fear and Greed Index ( closed in the Neutral stage for the first time since the market sell-off in October 2023. Stock market investors are now at odds against options traders and bond traders.

Stock market indicators, such as Market Momentum and Stock Price Strength, remain in the Greed stage. Option market indicators on the other hand, such as the put/call ratio and market volatility categories, are in Fear and Extreme Fear. And Safe Haven Demand (a bond market indicator) is also in Extreme Fear.

All of this points to the stock market being slow to react, and unreasonably bullish. I would suspect that over time bears will start to overpower bulls, and we’ll see the CNN Fear and Greed index drop down into the Fear and Extreme Fear categories. But how long we’ll sit in Neutral, waiting for bulls to stop buying the dip, remains to be seen.

The VIX rose another 8% last week, to close at 17.31. It even hit 19.20 on Friday, before recovering slightly. This is the second weekly close above 15 since the stock market sell-off in October 2023. A second close above 15 keeps the VIX in neutral territory. A close above 20 would be bearish.

Technical Analysis

The daily technicals have now turned 100% bearish. Every technical indicator is showing bearishness, with a further drop in the market ahead. If there’s any hope at all for bulls, it’s that the S&P 500 and Nasdaq have not yet broken below their 50 day EMA lines, and neither have yet seen the 10 day EMA cross below the 21 day EMA.

But in order for the markets to turn bullish, they’ll need to overcome extreme bearishness from both the DOW and Russell 2000. Despite last week’s sell-off, neither has yet reached an over-sold stage and both are indicating continued declines in the market.

For the first time since November of last year, the weekly technicals have started to turn bearish. The weekly technicals are much slower moving than the daily technicals, so they are the strongest indicator yet of a continued decline in the market.

I should note that the S&P 500 and Nasdaq have not yet turned bearish on the weekly technicals, although the current momentum will be hard to reverse, and I would expect them to turn bearish this week.

It’s too early to look for support levels where the market might bottom out. Right now, it looks like the market will fall at least another 5% before bottoming out.

Economic News

This week sees a lot of Fed speakers and a little bit of economic news. Since everybody is worried about rising inflation again, it will be the Fed speakers who are most likely to move the market this week. Watch out for any suggestions that the Fed might do another rate increase instead of a cut, as this could cause the largest market sell-off.

Some important economic news that’s being released this week includes the retail sales data on Monday, housing starts on Tuesday, the Fed Beige Book on Wednesday, and existing home sales on Thursday.

Here’s the full list of all of the economic news coming out this week as well as the time each report is being released:

Here’s what time each Fed member is speaking this week:


Earnings season is in full swing this week. Last week was not good for the banks. This week we’ll get more bank earnings on Monday and Tuesday, before moving on to other companies throughout the rest of the week.

The most notable earnings to watch out for this week include Goldman Sachs on Monday, Bank of America and United Airlines on Tuesday, ASML on Wednesday, TSMC and Netflix on Thursday, and American Express and Proctor and Gamble on Friday.


Crypto had a massive sell-off over the weekend when Iran attacked Israel. It has since recovered some of the losses, but still remains down significantly. While many are calling for investors to buy the dip, I would be cautious of the potential for a further escalation in the middle east, which might cause crypto to fall further.

Major support levels to buy-the-dip on Bitcoin at include $61,185, $57,580, $48,577, and $46,808.

If you do decide to buy-the-dip on crypto, make sure you transfer your crypto to a hardware wallet so it doesn’t get lost or stolen. I personally use a Ledger Nano X with Bluetooth, which I love. If you want to buy a Ledger to keep your crypto safe, Ledger is offering up to $50 in free Bitcoin when you buy one this week. You can see the current free Bitcoin offers here:

Other Things to Know

My new book has just been released! This is the ultimate trading journal, designed to help you become a more profitable trader. The book is available on my website at

Multiple trading platforms continue to offer free stocks and high yields on cash. So get your free stocks while you still can at

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Wishing you the best of success trading this week,
Stock Curry

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