by Ivan Martchev
July 21, 2026
It looks like the Iranian situation is going from bad to worse.
As of the time of this writing (Sunday), military strikes are intensifying on all sides. The more this escalates, the higher oil prices will go and the more damage Iran does to any U.S. allies in the Persian Gulf.
“You hit my infrastructure and I’ll hit yours” is not a good deal for either side, because infrastructure by definition is not easy to put back online – be it oil, LNG, power plants or water desalination facilities.
Military situations are always hard to forecast. In a best-case situation, negotiations can restart at any time, putting worries on hold. In such a case, we could see new market highs, as the stock market has gone sideways and rotated away from technology in what is expected to be a very good earnings season.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
If the firing of missiles continues to intensify over the next two-weeks and the flow of oil is reduced for that long, oil reaching $100 again is likely. Keep in mind the world is operating on lower inventories compared to the start of the conflict, so disruptions this time may be more pronounced than last March.
The more the Iran conflict intensifies, the worse the scenario gets. The official crossings of the Strait of Hormuz have declined to a level not seen since the most acute stages of the war (see chart below).
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
I cannot be sure which way the war may be going by August 1st, but right now it does not look good.
A New Market Barometer is the Price of SpaceX Stock
A good sentiment indicator for the stock market is the price of SpaceX, which broke below its IPO price of $135 last week. Some of its rocket engines did not start during a high-profile launch – which had to be scrubbed. I suppose this is better than the rocket blowing up, which has happened to SpaceX many times.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
After a successful launch, SpaceX should rebound. It’s possible about a third of the tiny float has been sold short, which opens possibility of a short squeeze, as only 4.3% of the shares are available for trading. The fact so many shares are short may be just a function of the level of options trading and hedging in the stock, not necessarily huge investor bearishness, although the shares were clearly overpriced at the IPO.
Elon Musk was a master manager of the Tesla share price for many years before it entered the S&P 500. I think he will try to do the same on a much larger scale with SpaceX. That means big deals announced at a time when share lockups begin to expire next month. There will likely be a fierce rebound if he delivers on any of his big deal headlines, but if he waits until the earnings release on August 6 and messes up another rocket launch, that rebound is likely to start from much lower levels – likely closer to $100.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
If the price of oil surpasses $100, the 200-day moving average on the NDX (NASDAQ 100) comes into play. I do not believe it is feasible for this situation to continue for months. President Trump said we have no more than four weeks in oil inventories the first time hostilities died down. Provided Iran was paying attention, they may have figured out they have 3-4 weeks of bombardment before the U.S. has to stop.
Are the Iranian Leaders Reading the Writings of Sun-Tzu?
It looks to me like the Iranians are taking a page out of Sun Tzu’s “Art of War,” on leveraging power:
“The art of using troops is this: When ten to the enemy’s one, surround him;
When five times his strength, attack him (if my force is five times that of the enemy I alarm him to the front, surprise him to the rear, create an uproar in the east and strike in the west);
If double his strength, divide him (if a two-to-one superiority is insufficient to manipulate the situation, we use a distracting force to divide his army);
If equally matched, you may engage him (in these circumstances only the able general can win);
If weaker numerically, be capable of withdrawing (if I am in good order and the enemy in disarray, if I am energetic and he careless, then, even if he be numerically stronger, I can give battle);
And if in all respects unequal, be capable of eluding him, for a small force is but booty for one more powerful (the small certainly cannot equal the large, nor can the weak match the strong, nor the few the many).”
Iranians know they are outgunned and outmanned, so they basically are using America’s regional allies as firing targets – and the rising price of oil as a weapon. In effect, a smaller force is doing more damage than what most would have predicted at the onset of the war. If there is a good example of Sun Tzu’s analysis of asymmetric warfare in the last 50-years, this has to be it.
To recap, if negotiations resume, the stock market likely delivers a fierce rebound. The longer the fighting goes on, the higher oil prices rise, given the stoppage of flow in the Strait of Hormuz and low global oil inventories. Whatever happens, The Trump administration likely has no more than 3 to 4-weeks to figure out a way out of this mess, as past that point there may be long-term damage to oil and civilian infrastructure in the region. That would be hard to reverse, with longer-term implications that the world hopes to avoid.
Navellier & Associates; do not own Space Exploration Technology Corp (SPCX) in managed accounts. A few accounts own Tesla (TSLA) per client request. Ivan Marchev does not own Space Exploration Technology Corp (SPCX) or Tesla (TSLA) personally.
All content above represents the opinion of Ivan Martchev of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Lower Inflation Should Postpone Fears of Rising Interest Rates
Income Mail by Bryan Perry
The Great Rotation into AI-Proof Healthcare
Growth Mail by Gary Alexander
Is it Possible for a Nation to Be Recession-Proof – for 50 Years?
Global Mail by Ivan Martchev
The Stock Market is Not Ready for $100 Oil
Sector Spotlight by Jason Bodner
What “Fractal Motion” in Markets Looks Like
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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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