by Ivan Martchev
March 10, 2026
In a good economy, we have started a market decline that is, at a minimum, headed into the area of the S&P 500’s 200-day moving average, now near 6,500. With the VIX index near 30, we may be there soon.
In a good economy like this, one should typically not look for bear-markets (or near-bear markets), but they can happen. In the tariff crash last April – seemingly launching a new trade war – we declined 20% from the all-time high, as measured by intra-day values. We quickly rebounded and advanced significantly higher when it became clear this was an aggressive negotiation not likely to cripple the U.S. economy.
The same kind of recovery can happen again, if the price of crude oil reverses and oil flowing through the Strait of Hormuz resumes – neither of which can happen without the Iranian hostilities winding down.
In some respects, the trade war last year is very similar to this kinetic Iranian war. The trade war last year initially created trade embargoes with some countries, inhibiting the flow of trade for some time. The acute phase lasted about a month, the first-week being the worst. The fog began to rise in late April and early May. This war with Iran is inhibiting the flow of oil, which is the most important of industrial commodities. If we follow the same pattern, which is what I am rooting for, we could be very lucky.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Crude oil soared above $94 on some near-term futures contracts on Friday and it is entirely possible by the time you read this on Tuesday morning we will be above $100 per-barrel. The higher the oil price goes, the lower the stock market goes, in my opinion, as it creates an oil price shock for many businesses. This can all end this week if the war winds down, which at the time of this writing does not look likely.
I think the Iranians will use oil as a weapon. They will want the price to go as high as possible. Therefore, I do not believe they will fold without boots on the ground, which cannot happen quickly. Anything is possible, and there may be a “boots on the ground” plan I am not aware of, but we need to wait and see.
The Oddly Passive Death of the Ayatollah – Did He Welcome Death?
I think the Ayatollah Khamanei, who got taken out by an Israeli airstrike, practically committed suicide. He was about to turn 87 in April and, because he was not hiding as the U.S. was amassing huge fire-power in the middle of negotiations, Iranians made the call that the negotiations were not sincere and there would be a war. After all, Iran got bombed in the middle of the nuclear negotiations last year.
Why would Khamenei do this?
The Iranians are Shia, and taking out their religious leader would make most Shias think twice before revolting against the current government in the middle of a war, even if they don’t like the Islamic Republic, which tells me this conflict is unlikely to end this week. As a standard operating procedure decapitating the leadership is a primary objective in any war, but this is not a standard war. It is religion.
I could be wrong, and even though I am not a big fan of the Islamic Republic, I think there is a very high likelihood Khamanei walked around with a bull’s-eye on his back completely intentionally. In contrast, last summer, he went so deep underground that many were not even sure if he was alive for a few days.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Turning to the S&P 500, charted above, we traded below the December low on Friday but did not close there. If the oil price keeps rallying this week, we are likely to do that soon. There is an old omen which basically says taking out the December low in the first quarter means a deeper correction, which I would estimate to be around 10%. Anything more means the war is not ending and oil prices will keep rallying.
There are shipping problems beyond oil, since oil is not the only commodity flowing through the Strait of Hormuz. In some respects, Europeans are in a worse situation due to energy shortages and high prices there. They blew up their natural gas pipelines from Russia, instead relying on Qatari and U.S. LNG, but Qatari LNG is not flowing because of the war, and nobody knows when those flows will resume.
Most investors don’t realize the #1 customer of Russian LNG is the EU, which was paying significantly less for the same natural gas before it was liquefied and flowing through the now blown-up pipelines!
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Rotterdam natural gas contracts (the EU benchmark, charted above) have doubled to 52.8 euros per-megawatt hour as of Friday. In plain English, this can be converted to $17.71/mmBTU in the U.S. price system, while U.S. front-month natural gas futures are $3.18/mmBTU. It looks like Europe is headed for another energy crisis if the war does not end soon. Europe’s much more sensitive energy price-crunch is why the German DAX benchmark declined 6.78% last week while the S&P 500 declined only 1.98%.
There is plenty of natural gas and oil in storage – if the war lasts only 4 to 5-weeks, as the Trump team originally projected. I sure hope they are right, because winning a war in a month is hard to guarantee.
All content above represents the opinion of Ivan Martchev of Navellier & Associates, Inc.
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Three Compelling High Yield Opportunities
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Will AI Really Destroy America’s Job Market?
Global Mail by Ivan Martchev
When Oil Reverses, the Stock Market Will Bottom
Sector Spotlight by Jason Bodner
Don’t Let Market Volatility Upset You
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Ivan Martchev
INVESTMENT STRATEGIST
Ivan Martchev is an investment strategist with Navellier. Previously, Ivan served as editorial director at InvestorPlace Media. Ivan was editor of Louis Rukeyser’s Mutual Funds and associate editor of Personal Finance. Ivan is also co-author of The Silk Road to Riches (Financial Times Press). The book provided analysis of geopolitical issues and investment strategy in natural resources and emerging markets with an emphasis on Asia. The book also correctly predicted the collapse in the U.S. real estate market, the rise of precious metals, and the resulting increased investor interest in emerging markets. Ivan’s commentaries have been published by MSNBC, The Motley Fool, MarketWatch, and others. All content of “Global Mail” represents the opinion of Ivan Martchev
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