Aside from a rise in oil prices, which were already trending higher prior to Israel's, and "tag-along" U.S., strike on Iran it remains to be seen what long term impact this will have on markets. I'm always looking at how indices relate relative to their 200-day MAs, and since the latter part of 2025 to now, this relationship is no longer overbought and not the risk I thought coming into 2026. However, we do have well-defined support levels to work with and these should be tested early next week. Again, a loss here wouldn't be hugely damaging as we have 200-day MAs below to offer support. What will be damaging is, as probably expected, the Iran conflict extends into a series of terrorist attacks on U.S. interests to goad the U.S. (and Israel?) into putting boots-on-the-ground in Iran. The Middle East is never a clear in-and-out, and there is no record of success for the U.S. to lean on here. In such a scenario, we have the makings of drip-drip losses in the market to turn the broader trend bearish. If such losses undercut 200-day MAs, then we would be heading into good buying territory for long-term investors, although news headlines will be negative.

The S&P finished Friday with a 'sell' trigger on higher volume distribution. There has been quite a few distribution days in February, and given the dubious gains from prediction markets in advance of the strikes on Iran, there is reason to wonder how much of February's selling was governed by insider information on 'possible' conflict; Friday's distribution before Saturday's airstrikes in a range-bound market - where historic volume action is typically light across market trading ranges - is certainly "odd". Either way, we will never know, and we can only work with the information presented to us, and as it stands, the S&P is a "hold".

The Nasdaq also flagged a distribution day, but not to the same degree as the S&P. The 200-day MA might get to range support at the same time the index falls to test this same support. Technicals are mixed, with only the MACD on a weak 'buy' trigger with an extended period of relative underperformance to the Russell 2000 ($IWM). In such a scenario I would look for a break of support, but let's see what happens.

The Russell 2000 ($IWM) may be the most immune to negative headlines(???). There was no distribution and it's holding 50-day MA support. On-balance-volume and stochastics are positive, a neutral ADX, and a MACD while trending down, but still above the bullish zero line. Again, let's see how the index reacts to the weekend news.

Bitcoin has acted relatively quietly to the Iranian news. There is a swing trade here based on the break of $65K or $70K. It's an oversold market, so if there is a downward break I wouldn't expect it to stay weak for long.

An interesting week lies ahead, but this is likely just the start of something, not the end.

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Investments are held in a pension fund on a buy-and-hold strategy.