"Iran Goes Dark: No More Nuclear Inspections After U.S. Bombs Fall... Market Yawn...

KR Opinion

This weekend witnessed dramatic developments as bombing raids targeted Iranian nuclear facilities, marking a significant escalation in regional tensions. Initial reports claimed destruction of the targets, but as the dust settles two days later, uncertainty has crept into the assessments. Military officials are no longer sure about the extent of damage achieved, raising questions about the effectiveness of an operation that reportedly cost $150 million for just six bombs—an astronomical sum that naturally leads to expectations of decisive results.

The international community remains deeply divided over whether the United States should have undertaken this action, but the deed is done, and now the world watches Iran's response. Tehran has adopted a defiant stance, announcing it will no longer permit any nuclear inspections and essentially rejecting all previous agreements and protocols. Iranian officials have issued internal proclamations threatening to close the Strait of Hormuz, although these remain words rather than actions so far.

The financial markets initially reacted with alarm. When crude oil trading opened, prices surged approximately 4% higher, but this spike proved short-lived. By the time I checked, the increase had moderated to just 2%, suggesting traders are betting against a prolonged crisis. Even more remarkably, equity indices that opened sharply lower have now reversed course and moved into positive territory.

Having studied similar geopolitical crises extensively since the Israeli attack, I've found that these events typically follow predictable patterns. The market disruption usually lasts about fourteen days, which would bring us to this coming Friday if the pattern holds. Historical data shows that equity markets decline an average of 2.1% during such episodes, with extreme cases reaching about 4%. The most severe reaction in recent memory occurred during the 1990 Gulf War, when markets plummeted 16.7%. Most of these crises prove to be short-lived and have no lasting market impact. In my Sunday night YouTube video, I discussed exactly this scenario and how markets tend to respond.

This geopolitical tension follows last week's Federal Reserve meeting, where officials took no action, continuing a pattern that makes the Fed appear increasingly irrelevant to market dynamics. Looking ahead to this week, we face a packed schedule of significant economic reports. The calendar includes U.S. manufacturing PMI, service PMI, consumer confidence data, home sales figures, and typical jobless claims, and concludes Friday with PCE price data that will provide fresh inflation insights. I expect that these reports will have minimal market impact, with trading likely to remain confined to recent ranges as the market has already adjusted its positioning.

Examining the overnight premarket data across multiple markets, the WaveTech Models are revealing distinct patterns and momentum profiles that provide a comprehensive picture of current market dynamics.

Regarding tonight's report format, I'm implementing a change to address technical issues with email size limits. Instead of embedding full data sheets, I'll provide clickable links to access the charts and interactive data sheets I reference.

Click the links provided throughout the report and follow the instructions to view the detailed data and analysis.

Week of June 23 – 27

The week of June 23-27 features several high-impact economic reports that will provide crucial insights into the U.S. economy. Monday kicks off with the S&P Global Manufacturing and Services PMI preliminary readings at 9:45 ET (prior readings of 52.0 and 53.7, respectively), followed by Existing Home Sales at 10:00 ET with a KR Forecast of 3.90 M. Tuesday's highlight is the Consumer Confidence report at 10:00 ET, expected to come in at 99.5.

Wednesday brings New Home Sales data at 10:00 ET (forecast: 690K) and the closely watched EIA Crude Oil Inventories at 10:30 ET, which previously showed a drawdown of 11.47M barrels. Thursday features the weekly Initial Claims report at 8:30 ET with a forecast of 249K, alongside Continuing Claims data.

The week concludes on Friday with arguably the most significant releases: Personal Income and Spending data at 8:30 ET (forecast at 0.3% and 0.1% respectively), plus the critical PCE Price indices including Core PCE, both expected to show 0.1% monthly increases, which the Federal Reserve closely monitors for inflation trends.

All Report Details

Jun 23 09:45 ET: S&P Global U.S. Manufacturing PMI - prelim For: Jun | Trading Impact: High | KR Forecast: NA | KR Cons: NA | Prior: 52.0

09:45 ET: S&P Global U.S. Services PMI - prelim For: Jun | Trading Impact: High | KR Forecast: NA | KR Cons: NA | Prior: 53.7

10:00 ET: Existing Home Sales For: May | Trading Impact: High | KR Forecast: 3.90M | KR Cons: 3.94M | Prior: 4.00M

Jun 24 08:30 ET: Current Account Balance For: Q1 | Trading Impact: Medium | KR Forecast: NA | KR Cons: NA | Prior: -$303.9B

09:00 ET: FHFA Housing Price Index For: Apr | Trading Impact: Low | KR Forecast: 0.1% | KR Cons: 0.0% | Prior: -0.1%

09:00 ET: S&P Case-Shiller Home Price Index For: Apr | Trading Impact: Low | KR Forecast: 4.2% | KR Cons: 4.1% | Prior: 4.1%

10:00 ET: Consumer Confidence For: Jun | Trading Impact: High | KR Forecast: 99.5 | KR Cons: 99.0 | Prior: 98.0

Jun 25 07:00 ET: MBA Mortgage Applications Index For: 06/21 | Trading Impact: Low | KR Forecast: NA | KR Cons: NA | Prior: -2.6%

10:00 ET: New Home Sales For: May | Trading Impact: High | KR Forecast: 690K | KR Cons: 700K | Prior: 743K

10:30 ET: EIA Crude Oil Inventories For: 06/21 | Trading Impact: High | KR Forecast: NA | KR Cons: NA | Prior: -11.47M

Jun 26 08:30 ET: Durable Orders For: May | Trading Impact: Medium | KR Forecast: 7.5% | KR Cons: 6.6% | Prior: -6.3%

08:30 ET: Durable Goods –ex transportation For: May | Trading Impact: Medium | KR Forecast: 0.1% | KR Cons: 0.1% | Prior: 0.2%

08:30 ET: GDP - Third Estimate For: Q1 | Trading Impact: Low | KR Forecast: -0.2% | KR Cons: -0.2% | Prior: -0.2%

08:30 ET: GDP Deflator - Third Estimate For: Q1 | Trading Impact: Low | KR Forecast: 3.7% | KR Cons: 3.7% | Prior: 3.7%

08:30 ET: Initial Claims For: 06/21 | Trading Impact: High | KR Forecast: 249K | KR Cons: 247K | Prior: 245K

08:30 ET: Continuing Claims For: 06/21 | Trading Impact: High | KR Forecast: NA | KR Cons: NA | Prior: 1945K

08:30 ET: Adv. Intl. Trade in Goods For: May | Trading Impact: Low | KR Forecast: NA | KR Cons: NA | Prior: -$87.6B

08:30 ET: Adv. Retail Inventories For: May | Trading Impact: Low | KR Forecast: NA | KR Cons: NA | Prior: -0.1%

08:30 ET: Adv. Wholesale Inventories For: May | Trading Impact: Low | KR Forecast: NA | KR Cons: NA | Prior: 0.0%

10:00 ET: Pending Home Sales For: May | Trading Impact: Low | KR Forecast: 0.6% | KR Cons: 0.4% | Prior: -6.3%

10:30 ET: EIA Natural Gas Inventories For: 06/21 | Trading Impact: Low | KR Forecast: NA | KR Cons: NA | Prior: +95 bcf

Jun 27 08:30 ET: Personal Income For: May | Trading Impact: High | KR Forecast: 0.3% | KR Cons: 0.4% | Prior: 0.8%

08:30 ET: Personal Spending For: May | Trading Impact: High | KR Forecast: 0.1% | KR Cons: 0.2% | Prior: 0.2%

08:30 ET: PCE Prices For: May | Trading Impact: High | KR Forecast: 0.1% | KR Cons: 0.1% | Prior: 0.1%

08:30 ET: PCE Prices - Core For: May | Trading Impact: High | KR Forecast: 0.1% | KR Cons: 0.1% | Prior: 0.1%

10:00 ET: Univ. of Michigan Consumer Sentiment - Final For: Jun | Trading Impact: Low | KR Forecast: 60.0 | KR Cons: 60.5 | Prior: 52.2

WaveTech Database Click Here for Dashboard

The WaveTech Database continues to show positive momentum across the markets, demonstrating broad market participation in the current rally.

What's particularly encouraging is the intermediate database gaining significant traction, with bullish sentiment climbing to 53.26%. The following critical targets for this metric are in the 58-62% range, and achieving these levels would establish a solid, forward-looking foundation for sustained market momentum. This configuration signals continued upward momentum ahead, supporting the likelihood that markets will maintain their current sideways trading range with an upward bias.

On the daily timeframe, we're seeing some negative rotation in the database, which has declined to 76% from 841 exits. This explains the short-term selling pressure we've been experiencing. However, since we're still well above the critical 70% threshold, this minor weakness isn't materially concerning given the overall bullish configuration. This is precisely why we continue to see markets bounce back even after periods of weakness.

The weekly momentum indicators remain bullish across both the 1.2a and 3.2a timeframes at a 7.78 ratio, with the S&P 500 holding near the psychologically important 6,000 support level. We're currently in week 12 of the sustained traction phase, showing +7.14 weekly momentum, which aligns with the "Momentum Ignition" phase that carries a 75% success probability for continued upward movement.

Looking forward, nothing in the current data suggests any material change to the bullish trajectory. The database configuration continues to indicate a solid underlying bullish tone in the markets. However, traders should monitor whether the intermediate database can achieve that important 58-62% target zone for additional confirmation of strength. This would provide even more confidence in maintaining long positions while respecting the short-term volatility that naturally occurs within broader uptrends.