Happy Masters Sunday. Pulling for the old man Rose or our fun drunk Lowry to close it out. But the gap we care about is not at Augusta.
Vance walked away from Islamabad Saturday. No agreement after a full day. Trump posted hints of a naval blockade and renewed military action hours later. Monday opens into a failed negotiation, not a ceasefire.
ES closed 6,865 Friday on peace hope. Oil dropped 12% last week on deal optimism. That deal collapsed. The market priced peace. Oil did not. Oil was right.
The heaviest earnings week of Q1 still lands: JPM, C, WFC and three more Tuesday, ASML Wednesday, NFLX Thursday, monthly opex Friday. The question is whether earnings can absorb the geopolitical gap or whether Monday’s open sets the tone for the week.
The Lie moves to +2 (CONSTRUCTIVE). Was -1 two weeks ago. Capitulation is effectively done, institutional call-to-put direction flipped positive for the first time in months, cyclicals are leading defensives. The reason it is +2 and not +3: oil vol has not come in. When equity vol crushes and oil vol holds, the risk is not gone. It is repriced.
The scorecard, the gap playbook, and six levels for the week are below the fold.
