Meanwhile, Iran looks ready to present the new scheme of passage through the Strait. Iran plans to monitor traffic through the world’s key oil route together with Oman. Any vessel that passes through the Strait of Hormuz would be required to pay a toll.
Recent reports indicated that some vessels have already started to pay Iran to get through the Strait of Hormuz. It remains to be seen whether Iran’s plan will work as vessels pass through international waters. Western countries, as well as Iran’s neighbours in the Gulf, will surely oppose the plan.
Interestingly, Iran’s plan was sufficient to make traders rush to buy stocks. It looks that traders are searching for reasons to buy stocks after the recent pullback. It remains to be seen whether it is a good idea as the risks of a ground operation in Iran are rising. Such an operation may push oil prices towards historic highs, which will be bearish for stocks.
Not surprisingly, energy stocks were among the biggest gainers in today’s trading session. Real estate stocks have also gained upside momentum as traders reacted to the pullback in Treasury yields.
Consumer cyclical and healthcare stocks were among the biggest losers today. Basic materials stocks have also found themselves under pressure as traders reacted to pullbacks in gold and silver markets.
Currently, SP500 is trying to settle above the resistance at 6550 – 6560. In case this attempt is successful, SP500 will move towards the next resistance level, which is located in the 6640 – 6650 range. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.