Stocks Go Brrr While Geopolitics Goes Oof: The 'Volume? Never Heard of Her' Rally

US equities kept printing green on Tuesday, blissfully ignoring the geopolitical dumpster fire around Iran like a degen ignoring a wallet drainer warning. The S&P 500 pumped 0.6%, the Nasdaq bagged nearly 0.7%, and the Dow casually added another 250 points to its bag. Meanwhile, oil decided to join the party, up about 2% with Brent crude reclaiming its throne above $100 a barrel—because why not.

This comes hot on the heels of Monday's rip, where the S&P 500 gained a cool 1%, the Nasdaq rose 1.2%, and the Dow yeeted itself over 300 points higher. Part of that move arrived after oil prices took a breather, a retreat partly credited to a classic case of "misinformation alpha" from Treasury Secretary Scott Bessent about letting Iranian oil tankers sail free.

Not everyone is sipping the bullish Kool-Aid, however. Goldman Sachs' Tony Pasquariello warned his clients the market might be pricing in peak hopium, stating he's "surprised that market participants aren't more concerned." A rare voice of caution in a sea of green candles.

The narrative around the logistics is fuzzier than a bear market roadmap. Reports of an escort coalition forming in the Middle East were promptly rug-pulled by Donald Trump, who declared the group was "still not complete." He later posted on Truth Social that most NATO allies have about as much desire for a military op against Iran as a crypto trader has for a 20% sell-off, despite broad agreement on preventing an Iranian nuke.

The rally itself is showing some technical cracks, like an NFT project with a great website and no utility. Trading volume has been pathetic. The SPY ETF traded 71.3 million shares against a 30-day average of 88.5 million. The QQQ traded 44.4 million shares against a 71.5 million average. In short, price went up, but the party had more empty seats than a metaverse conference.

Chart analysis paints a classic "trust me bro" split picture. The S&P 500 holds above its 200-day moving average, a key trend level for the copium addicts. However, Wolfe Research's Rob Ginsberg notes the financials sector, down 4% this month and "deeply oversold," needs to recover for this rally to have any real conviction—otherwise it's just a dead cat bounce in a nicer suit.

For the Dow, short-term oversold conditions are flashing for the first time since November, with indicators hinting at a potential "buy the dip" rebound this week. Resistance looms at the 50-day moving average near 49,000. However, momentum loss and a bearish weekly MACD crossover suggest any bounce may be as brief as a shitcoin pump, potentially giving way to a drop below the 200-day average, with former highs near 45,000 as the next support level.

The correction may follow an A-B-C pattern, pointing to another leg down after a feeble rebound, with a more important low potentially still weeks away—markets doing the classic "we're fine... we're fine... oh god" routine. One tiny silver lining for the boomer index: the Dow-to-S&P ratio suggests the Dow may fall less than the S&P through the rest of this correction, so it gets to be the least ugly dog in the show.