So, finally, the US decided to get into the act. Will that shorten the war or elongate it further? That is the only question that matters here. Iran does not have to react on the US but they can create problems in different ways. The first one is to block the Strait of Hormuz which would send the price of oil soaring, affecting the world economically. They can retaliate through splinter groups like JeM and the LeT etc and keep unrest going all over etc etc. Meaning, the ‘war’ can drag on. This will not be good for markets.

Best is to continue to watch progress of Brent and CL oil to get a clue on what Iran may do. Our markets may open with a down gap yet again, getting pushed back into the range after Friday’s strong push higher. Another chart to watch would be the Israeli index. This hit new highs yesterday (it works on Sunday) but that is out of some exhilaration of winning this war. But Saudi Arabia, which also works on Sunday, was slightly soft and overall, it is already on a downtrend. Perhaps, the Saudis worry of what Iran may do next.

No point in going into today with any pre-decided views. Shorts have been cut and longs may be created and so, the market may be net long. The largest position in options in both indices are in short Puts- at 25000 and 56000. That should give you an idea of how the sentiment is positioned. Hence dont trifle with decline if they emerge. Protect your longs with stops without fail.

But markets have also been shaking off these threats with a single day decline. Will it do so again? Lets see. If it does, well and good and we can then trade long. Else, we make new plans. If 24800/5999 are lost, exit longs and move to the sidelines.