No Panic! Multiple Indicators Signal a Buy-the-Dip Window

With crude oil prices surging and U.S. equities selling off sharply, this may ironically be setting up another round of Trump’s so-called “TACO trade” dynamic.

Trump appears somewhat rattled, even floating the possibility of a ground invasion. To anyone paying attention — even those without military expertise — this looks more like posturing than preparation. Compared with U.S. troop deployments during the Iraq War, current American military presence in the Middle East is far more limited. The U.S. is reportedly even redeploying THAAD missile defense systems from South Korea to the region.

Moreover, both chambers of Congress — including Trump’s MAGA base — are strongly opposed to a ground war. Deploying large numbers of troops would risk dragging the U.S. into a prolonged conflict. Has the lesson of Afghanistan not been sufficient?

Trump is likely watching tonight’s stock market action closely. If financial volatility intensifies, it would not be surprising to see all sides find an off-ramp, allowing tensions to gradually cool. A “win-win-win” declaration could follow, and markets might stabilize.

There are also several indicators suggesting markets are not in full panic mode.

The rally in industrial stocks is a positive sign that investors are not immediately pricing in higher oil prices and geopolitical uncertainty as inevitably leading to a global recession.

Crude oil prices are up roughly 40% from their one-year lows. Historically, oil typically needs to rise 80–100% over a 12-month period before a U.S. recession becomes unavoidable — suggesting current levels are not yet recessionary.

The CBOE Volatility Index (VIX) is trading near 27, its highest level since April 2025 when Trump imposed reciprocal tariffs. However, it remains far below the panic peak of 60 seen during the most intense tariff turmoil. As an old trading saying goes: “Retail traders open the market, but institutional investors close it.”