Latest Futures Class Recap: Under a Fragile Ceasefire, the Strategy to Navigate Bull and Bear Market

Against the backdrop of the macro environment, this class focuses on the correlations among major U.S. asset classes, with an emphasis on the trends of U.S. stock indices and precious metals (CME COMEX gold futures & options, silver futures & options). It also provides brief comments on the current rapidly changing geopolitical situation, highlighting the importance of identifying trading opportunities and risk control amid uncertainty.

Course Link: U.S.-Iran ceasefire breaks down and fighting resumes? How to find a high-probability strategy that can survive both bull and bear markets?

Class Recap Summary:

In April 2026, the United States and Iran reached a 14-day temporary ceasefire agreement, intended to open a window for final peace negotiations. However, from a professional trader's perspective, this agreement is extremely fragile. Geopolitical risk has not disappeared but has shifted from an "explosive shock" to a "persistent disturbance." This article synthesizes views from a recent online seminar and systematically reviews the trends and strategies across three major asset classes: crude oil, U.S. stocks, and gold & silver.

I. Macro Situation: Multiple Rifts Under a Fragile Ceasefire

1. The Ceasefire Agreement and Its Essence
On Tuesday (Beijing time), the U.S. and Iran announced a 14-day temporary ceasefire. However, mutual trust is extremely low, and there are fundamental differences in core demands. The market reacted swiftly—crude oil prices plunged more than 20% in a single day—but subsequently did not continue lower, instead entering a high-range consolidation. This in itself indicates that the market does not truly believe peace has arrived.

2. Six Potential Risks of the Agreement Breaking Down

• Decoupling of the Lebanese Conflict: Israeli Prime Minister Netanyahu has clearly stated that the ceasefire does not include Lebanon. Israel's goal is to "solve historical problems once and for all" and completely eliminate Iran's resistance forces in the Middle East. Iran, on the other hand, cannot accept its important proxy—Hezbollah in Lebanon—suffering heavy losses during the ceasefire. This decoupling directly undermines the integrity of the agreement.

• Disagreement Over Strait Passage Conditions: Trump demands "full, immediate, and safe" reopening of the Strait of Hormuz, while Iran advocates for "controlled passage." Although the substantive difference between the two is not as large as it appears on the surface, the strait remains closed at present, and any party's intransigence could lead to a breakdown in negotiations.

• Risk of Unilateral Israeli Action: Israel views the ceasefire as a strategic failure, fearing that Iran will use the 14 days to relocate nuclear facilities or reorganize missile forces. Consequently, Israel may proactively conduct "decapitation" strikes or cyberattacks, effectively aborting the agreement.

• Iran's Extreme Demands and Negotiation Deadlock: Iran demands the full lifting of U.S. sanctions and recognition of its right to uranium enrichment. These conditions are nearly impossible to accept under the current U.S. political environment. The outcome of the talks in Islamabad this Friday is unknown. If a deadlock is reached, the two sides could quickly resume hostilities or even escalate to airstrikes.

• Iran's Internal "Mosaic Defense" Mechanism: Iran's military command structure is highly decentralized, with provincial commanders possessing independent action authority. During the temporary ceasefire, information lags may lead local forces to mistakenly initiate attacks, breaking the ceasefire.

• Iran's Political Landscape: Analysis suggests that the Islamic Revolutionary Guard Corps (IRGC) and hardliners have effectively taken control of Iran, with reformists marginalized. Hardliners lack any willingness to compromise, and the ceasefire is likely to be actively broken by them. Some even predict that Kharg Island could be occupied by U.S. forces by the end of April.

3. Possible Consequences If the Situation Spirals Out of Control
If the agreement breaks down and the conflict escalates, three levels of cascading effects could occur:

• Regime Control: The IRGC may completely take over the regime, rendering the civilian government a mere facade, making Iran's policies even more unpredictable.

• Crude Oil Transport: Gulf states will accelerate the construction of alternative routes, gradually reducing dependence on the Strait of Hormuz; crude oil from non-Middle East producers will become highly sought after due to supply security.

• War Expansion: In the future, a coalition of countries whose interests are damaged may directly wage war on Iran, with the goal of overthrowing the rule of the IRGC.

The current ceasefire, while providing a temporary exit, remains highly uncertain due to the complex and intertwined interests of multiple regional parties, lack of trust, and fundamental differences in core demands. Markets will remain sensitive to geopolitical risks, energy supply security, and regional conflict dynamics. It is advisable to adopt a prudent risk management approach, flexibly adjust positions and hedging strategies to capture potential gains from volatility while guarding against potential systemic risk contagion.

II. Asset Trend Analysis and Trading Strategies

1. Crude Oil: High-Range Consolidation, Short Volatility

Trend Judgment
The ceasefire news triggered a single-day 20% plunge in oil prices, a pattern highly similar to 2022. Currently, WTI crude oil is in a high-range consolidation pattern. If the ceasefire and negotiations fail to make substantial progress, this consolidation could extend into May. Oil prices are unlikely to return to a one-way rally (because the ceasefire news has suppressed the war premium) nor to break down sharply (because the fragile situation could reverse at any moment).

Strategy Discussion
The best strategy at this point is not to predict direction but to trade volatility. Specifically, consider selling strangles (e.g., a combination with strike prices of $84 and $130) to short volatility and collect time value. The previously discussed strangle positions have already expired, and the currently held crude oil strangles are also nearing expiration, with most positions already closed. Conclusion: In a range-bound market, short volatility strategies have a much higher win rate than directional bets.

2. U.S. Stock Indices: April Is a Key Observation Window – Beware of a "False Rebound"

Macroeconomic Background
Actual U.S. macroeconomic data have improved slightly. Goldman Sachs's economic surprise index turned positive to +0.8, benefiting from last year's policy groundwork and continued AI investment. The economy shows some endogenous strength, and concerns about stagflation are temporarily mild.

Historical Patterns
Historically, unless economic growth and inflation collapse simultaneously, markets usually recover quickly. Take the S&P 500 as an example:

• Around 1980 and during the 1991 Gulf War, the index rebounded and even hit new highs within a month.

• The only exception was 1973, when the economy and inflation simultaneously worsened, leading to a downturn that lasted one and a half to two years.

Current conditions do not resemble 1973, so there is no reason for excessive mid-term pessimism.

Valuation and Positioning
The S&P 500's forward 12-month P/E ratio is 19.8x, slightly below its 5-year average. Expected earnings growth for tech growth stocks remains strong, and valuations are near last year's "Liberation Day" lows. From a positioning perspective, long positions in tech stocks have been reduced, and the market is generally net short but not at extreme levels. CTA flows are structurally supportive of upside—if the index breaks through key levels, it could trigger forced buying and accelerate gains.

Trend Judgment and Risk Notes
U.S. stocks have already rebounded significantly in advance. If the war truly ends by the end of April, this rally could run its course once market euphoria fades. April is a key observation window, analogous to March 2022—when the market also rebounded but then continued to fall sharply. Key resistance is at S&P 500 6720–6740.

Strategy Discussion
For the Nasdaq, avoid the "false rebound" trap similar to March 2022. The probability of a trending rally is low at this stage, making range trading or spread strategies more suitable than blindly chasing highs.

3. Gold and Silver: Technical Rebound in April–May – Use Option Spread Strategies

Early Forecast and Validation
As early as March 31, professional views predicted that tensions in the Third Gulf War would cool by mid-April, and that before that, U.S. stocks, gold, and silver might rebound or rally in advance, while oil prices would consolidate and pull back at high levels. This judgment has been initially validated by market movements. The seminar clearly stated that the tactical opportunity in gold and silver during April is superior to that in crude oil and U.S. stocks.

Medium-Term Technical Judgment
Looking at the gold quarterly chart, after a long upper wick, the subsequent pattern is often sideways consolidation. This implies that gold is unlikely to make new highs within a year, but also unlikely to crash. This is an ideal technical environment for short strangles.

Specific Strategy – Consider Short Gold Strangle
Example: Sell a CME gold strangle expiring in July, with put strike at $4175 and call strike at $5500. Credit received approximately $118, maximum return per contract around $23,000. This strategy expresses the core view that gold is unlikely to break the wide range of $4175–$5500 this year. If prices oscillate within the range, the premium is pocketed. Even if prices deviate slightly, as long as they don't touch the strike prices, the position can be held to expiration. If profits are available, early exit is also possible.

Conditions for Establishing a Silver and Gold Rebound

• Silver shows a channel-like upward structure on the hourly chart. Key resistance is at $76.70. A close above that level is a necessary condition to confirm the rebound.

• Gold key resistance is at $4810. Similarly, a close above that level is required.

Once these conditions are met, the rebound targets are: Gold $4900–$5150, Silver around $90.

Trading Mindset and Strategy Choices
The seminar particularly emphasized avoiding naked directional bets. Instead, consider using spread strategies (e.g., bull call spreads) to express directional views. This way, during choppy or sudden pullbacks, you won't experience the painful scenario of "can't hold the position" or "price snaps back right after you stop out." For investors who have undergone systematic training and have a mature trading framework, limited directional bets may be made after a breakout of key levels.

III. Core Trading Principles to Navigate Volatility

1. Do Not Rely on Fundamentals or News
   Trading cannot be based solely on fundamentals, nor can you follow news—especially since much news is taken out of context or even false. You need a robust trading framework that allows you not to over-rely on external information. Trading decisions should be based on price action, volatility levels, and risk-reward ratios.

2. Use Option Strategies to Express Views and Control Drawdowns
   In the current market environment, three mainstream strategic approaches:

• Bullish on channel-like uptrends: After breaking key resistance levels, use spread strategies (e.g., bull call spreads) or small-sized directional entries.

• Bullish on full-year range-bound movement: Use short strangle strategies, dynamically adjusting strike prices and expirations.

• No clear short-term direction: Short volatility (e.g., sell strangles) to collect time value.
  Regardless of which strategy you adopt, strictly control the maximum account drawdown to around 10%. This is the lifeline for navigating geopolitical uncertainty.

3. April Is a Watershed for U.S. Stocks
   The S&P 500's 6720–6740 area is key resistance. If it fails to break through and hold, the "false rebound then sharp drop" scenario similar to March 2022 may repeat. In that case, shift to defense or reverse positioning. If it breaks strongly and holds above, then the medium-term outlook can be more optimistic, but the current probability of that is low.

Summary

The U.S.–Iran ceasefire is fragile, with risks tied to Lebanon, the Strait of Hormuz, Israeli unilateral action, Iran’s extreme demands, decentralized military decision-making, and hardliner control of the regime. If it collapses, geopolitical risk stays elevated, crude oil is more likely to stay range-bound than trend, and short-volatility trades such as selling strangles may be preferable to directional bets. U.S. equities have rebounded, but the S&P 500’s 6720–6740 zone is key resistance, so a 2022-style false rebound remains possible and range trading or spreads may be more suitable. Gold and silver have also rebounded technically: gold likely consolidates sideways after a long upper wick, while silver remains in a channel uptrend. Key levels are gold at 4810 and silver at 76.70; if they break, targets are gold 4900–5150 and silver around 90. Across all views, avoid naked directional bets, prefer option spreads, and keep maximum drawdown near 10%.

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