Tail Risks Unlike I Have Seen In My Four Decades Navigating Markets

Good Thursday Morning, MPTraders!  April 9, 2026-- Pre-Market Update: 

-- The range of positive, expected, or feared outcomes and the propaganda from the belligerents has created extreme, but increasingly plausible tail risks unlike I have seen in my four decades navigating markets... Hopefully, the tail risks will narrow rather than widen further after this Saturday's face-to-face U.S.-Iranian negotiations, which will be welcome news ahead of a new Earnings season starting next week, when investors might be able to refocus on business and the economy, rather than gaming more War...

In the meantime, overnight, May Crude Oil steadily crept higher (see my attached Chart) from 96.50 to 99.69, which placed the recovery rally into key resistance that extends up to 102.00. From a pattern perspective, if the post-cease fire plunge has unfinished business on the downside into new reaction low territory beneath Tuesday's low at 91.05 (my preferred scenario), then this recovery rally should fizzle and roll over in and around 102.00. 

Conversely, a sustained climb above 102.00 increases the likelihood of upside continuation toward 106-110, which WILL get the attention of the equity markets-- the sellers, that is.

My attached SPY chart shows the high-level Coil-degestion pattern remains intact atop the "cease fire" vertical spike.  My preferred scenario calls for a thrust to the upside from the Coil that propels SPY to a new post-cease-fire high projected into the 681 to 683 target window.

However, if May Crude Oil grinds or accelerates above 102.00, and if the still-intact inverse relationship between Oil and the stock indices remains true to form, SPY will roll over, breaking Coil support from 671.47 to 672.87, leaving SPY vulnerable to a much deeper correction of Tuesday's explosive advance... For now, the bullish scenario is hanging on... Last is 673.55...