Author: AndyO;Source: X,@andyz8818576155
The Iran war has not officially ended, but the nature of the war has changed from the moment US warships entered the fray and effectively blockaded the waterways related to the Hormuz.
It is shifting from "military strikes" to "forcing Iran to surrender."
The market direction will be determined by whether Iran will be forced to accept an extremely undignified agreement after losing the leverage of the Hormuz.
The next factor to determine the market direction is:
II. The driving force for peace is strengthening.
Although a final agreement is unlikely to be signed directly in the short term, the underlying forces driving the situation toward "limited peace" are indeed rising.
1. The economic pressure within Iran is no longer just ordinary difficulty, but is close to being out of control.
The strongest driving force for peace now is not the US-led TACO, nor European pressure, but rather Iran itself is on the verge of collapse.
The Central Bank of Iran has warned that if the fighting continues, inflation will surge to 180%, unemployment will increase by 2 million, and the economy will regress by more than a decade.
For any regime, once the internal economic order begins to collapse, so-called toughness will ultimately have to give way to maintaining stability.
2. ... It's clear that the US leadership doesn't want to prolong the war indefinitely. Trump has repeatedly signaled his desire for an end to the war, saying that Iran has reached an agreement with him and that many issues are "almost settled." While not all of this is entirely credible, it at least indicates one thing: the White House now prefers a "publiceable agreement" rather than a long-term quagmire that will consume oil prices, inflation, and votes. 3. Capital markets have already reacted. The S&P 500 has erased its losses since the Iran war, and the Nasdaq and Bitcoin are both strengthening. This reflects capital betting that the negotiations will likely eventually return to the negotiating table. The logic of the capital market is very realistic—as long as things don't spiral out of control, as long as the Hormuz agreement isn't permanently paralyzed, and as long as there's still a window for negotiations between the US and Iran, funds will first adjust for the "worst-case scenario." Currently, there's a clear divergence between oil and the stock market: oil prices are pricing in real risks, while the stock market is pricing in optimistic expectations for future peace talks. III. Is this "True Peace"? The real underlying contradictions in the Iranian peace talks remain unresolved. 1. Iranian negotiators likely don't have the final say. Vance has already stated it bluntly: the Iranian delegation at the Pakistan talks simply doesn't have the ability to make the final decision. The real decision-makers are at a higher level, perhaps even the Supreme Leader himself. This means that even if the atmosphere at the negotiating table is good, it doesn't guarantee an agreement will be implemented. Because what Iran is giving up isn't some minor detail, but the nuclear issue, a national security strategy, and the legitimacy of its regime. Such matters cannot be decided internally in just a few days. 2. The differences between the US and Iran on the nuclear issue remain structural. What the US wants is: a long-term halt to the enrichment program (30 years), the removal of stockpiles, and ideally, the complete crippling of Iran's future nuclear capabilities. What Iran wants is: to retain some leeway, accepting only a shorter window of opportunity (5 years), and replacing a complete surrender with dilution. This is not a typical disagreement where "details can be discussed later." One wants you to surrender your weapons, the other only wants to surrender a smaller amount of ammunition. This structural contradiction cannot be resolved with just a few rounds of pleasantries. 3. The specific arrangements for the next round of talks haven't even been finalized yet. Currently, the US, Pakistan, and Turkey are all pushing for the next round of face-to-face talks. Note that it's "pushing for the next round," not "already preparing to sign." This indicates that things are still in the diplomatic rhetoric and tactical probing stage, far from being truly finalized. 4. The real impact of the blockade may be more cautious than political pronouncements. Trump can talk about how many ships passed yesterday to downplay the impact. But the market sees something else entirely: Will ship owners dare to continue sending ships? Will insurance companies dare to continue underwriting? Will shipping costs skyrocket? Will oil prices rise further due to continued expectations of Iranian supply disruptions? If the blockade changes from a verbal threat to a sustained physical reality, then a second wave of oil price and inflation shocks will not be a story, but a reality. This is why Federal Reserve officials are already warning that once oil prices continue to rise above $90, the risks of inflation spillover and deteriorating consumer sentiment will increase. 5. Agent networks remain the biggest tail risk. Hezbollah has openly defied the US, and there are reports of a possible attack on the Bab el-Mandeb Strait from the Houthi perspective. This situation is more dangerous than many people realize. This is because the Strait of Hormuz is a global energy lifeline, and the Bab el-Mandeb Strait is a global shipping chokepoint. If both of these points are compromised simultaneously, the impact will not only be on oil, but on the entire global trade system. If an attack also occurs on the Bab el-Mandeb Strait, the current market optimism based on the expectation that "the situation will gradually ease" will be instantly shattered. IV. Conclusion From the very first day of the war, my fundamental judgment has remained unchanged: In terms of conventional warfare capabilities, Iran does not possess the ability to directly confront the US and Israel to the end. Iran's true fighting capability lies not in conventional warfare, but in "unrestricted warfare": utilizing proxy networks, the Taiwan Strait, and global energy prices to blackmail its adversaries. However, now that the US has decided to deploy warships and take direct control, it's tantamount to dismantling Iran's strongest geopolitical leverage. Therefore, I believe that the strategic phase of the Iran war is already nearing its end. The uncertainty now isn't whether Iran can turn the tide, but whether the hardliners of the Iranian Revolutionary Guard are willing to concede gracefully. If they don't concede, there's a risk of accidental clashes, escalation of proxy wars, and renewed localized conflict. If Iran concedes defeat, the regime will face enormous internal turmoil, as this would be tantamount to being forced to accept a major concession on the nuclear issue while being controlled by the United States in the Strait of Hormuz. This would have a significant impact on Iranian internal politics and could potentially lead to regime change. V. What does this mean for the market? Short-term outlook is slightly positive, but long-term volatility remains a risk. The reason for the short-term positive outlook is simple—the market will continue to trade on the "war nearing its end, increased probability of peace talks, and restored risk appetite." As long as there is no escalation of both the Hormuz and Bab el-Mandeb Strait incidents, short-term sentiment will remain supported. However, the long-term outlook may not be good. Because if Iran, a crucial pivot in the Middle East, is crippled, the geopolitical landscape will undergo profound changes, rewriting the subsequent energy, allies, and regional balance. Is Iran truly willing to concede and relinquish its nuclear capabilities? Sixth, Investment Strategy. My strategy remains unchanged: For A-shares, short-term position allocation will continue to be determined by the CSI 1000 index. As long as the price remains near and holds above the 20-day moving average, the short-term bias remains bullish. In terms of direction, continue to consider short-term opportunities in two types of stocks: The first category is undervalued stocks with projected earnings growth. The second category is stocks with clear price increase logic and the most direct profit elasticity. Because in the current environment, the most certainty is never in storytelling, but in performance. Especially for price increase themes, once the price transmission begins to materialize, it's the direction most easily reinforced by the market. The strategy is simple: hold long positions above the 20-day moving average, and exit if it falls below. This short-term strategy has remained unchanged from last week to today. Those who like short-term trading should just follow the discipline; don't chase hot topics one minute and get scared off by news the next. Regarding long-term investment, my view remains unchanged: **Now is not the best time to buy.** The truly comfortable long-term buying point is often not when the market is still debating whether there will be a war or negotiations, but rather after the risks have been more fully priced in. Therefore, be patient and don't rush. In conclusion: **The current reality is not that "peace has arrived," but rather that "the willingness to negotiate is increasing, but overall, pressure is being applied while negotiations continue."** The US is using the Strait of Hormuz for maximum pressure, while Iran is using proxies and delaying tactics to counter blackmail. The market has already priced in optimistic expectations but hasn't left enough safety margin for "shipping disruptions, a second wave of oil price shocks, and a breakdown in nuclear negotiations." Furthermore, if Iran were to surrender, would it truly be a good thing for China (considering the loss of its geopolitical allies in South America and the Middle East)? Therefore, in terms of trading strategy, short-term traders can continue to buy based on moving averages, while long-term traders should remain cautious. Don't overestimate Iran's ability to turn the tide, and don't underestimate the long-tail risk of hardliners making a last-ditch effort. This is the most crucial point to understand in today's market.