The Friday session was about crude oil and keeping an eye on the Middle East.

Energy (XLE) led the way, followed by Consumer Staples (XLP) and Financials (XLF).

The most significant declines were in Materials (XLB) and Communication Services (XLC), but the declines didn’t raise any red flags.

It was a calm session with few participants, and the most significant concern didn’t materialize until the weekend.

Themes

Earnings: The Kroger Co. (KR) and CarMax (KMX) surged on their earnings results.

Industry Mergers: Building and construction stocks are moving as consolidation has begun. Builders FirstSource Inc (BLDR), Lennar Corp (LEN), and NVR Inc (NVR) are making noticeable gains.

Stablecoin: Coinbase Global (COIN) continues to benefit and an over 650% rally in Circle (CRCL).

Heat Map

Financials are looking beautiful, with giant banks in the green.

Limited Movement

There was limited movement, but there was also a feeling that this was the calm before the storm. Value and low volatility caught bids, but the only meaningful move was the decline in large-cap growth.

Fear Index

The Volatility Index (VIX) has begun to meander around 20, a significant historical inflection point.

Iran’s Move

The media is abuzz over the bombing of three nuclear facilities. I don’t think it will affect the market, as it didn’t alter the presidential election’s outcome and hasn’t sparked higher inflation (although it played a role in the massive market slide earlier in the year).

There has been a long-running debate over the origins of chess. Most historians agree it was created in India and perfected in Iran.

Let's hope the leaders of Iran make the right move for their nation and the world. That would include not attempting to close the Strait of Hormuz and not attacking Americans.

We enter the day, bracing for anything, hoping for the best, and praying for humanity.

Today’s Session

The same folks, that probably gave the Mullahs more confidence in their belligerent behavior, have been burning the airwaves of social media, and every communications' offer that Iran remains formidable and will wreak havoc.

The first move is supposed to be the closure of the Strait of Hormuz. Chances of that are fading for several reasons including the most important: it makes absolutely no sense.

Oil should hold steady here.

This is the kind of atmosphere that allows some to ring the register without an alarm. It will be interesting to see how much of that happens today.  I see lots of “hot stocks,” under pressure.

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