Sen Rubio: “Barring some last-minute development, Iran is going to attack Israel”

There have already been a number of different reports about Iranians attack on Israel in response to killing of officials in Damascus. Now US Sen. Rubio is on the wires saying:

• Barring some last-minute development, Irene is going to attack Israel

US stocks are lower with the NASDAQ index down -1.34%. The declines are matched by the small-cap Russell 2000 (-1.31%). The S&P and Dow industrial average are down about 1% each.

US yields are lower. Gold is higher. Risk off sentiment is being seen in the currency markets?

What next?

It seems a fait accompli that there is going to be a response. Most of the time, these fears happen and the fears go away. Unless there’s a full out World War III (in which case we’e all dead), it represents more of a “buy the dip” opportunity.

Easier said than done, but it does tend to happen – eventually.

Looking at the S&P index, the low price today equal the low price today is near the low prices from earlier this week at 5138. The low-price reached 5137.39 so far. So dip buyers have stuck the “toe in the water”.

Does it hold?

We don’t know, but traders who want to let the market decide, the level is so far a support target that has attracted some buying. Move below would have traders looking toward the 5109 level which was home to lows going back to March 15. Below that and the 5056.92 down to 5042 are other targets (see chart below).

So far, however, the lows from early this week are holding support in the broad S&P index. Dip buyers are buying the dip. If the price goes below, we go lower and look to the next target, but ultimately, the threat of war, is a “buy the dip” trade.

This article was written by Greg Michalowski at www.forexlive.com.