Today's killing of a top Iranian general, Qasem Soleiman, in a Baghdad airport in Iraq by the U.S. miltary is sparking a storm of debate in American political arenas. Pro-Trump Republicans are defending the killing of Soleiman claiming he was actively plotting strikes against the U.S. embassy and had been responsible for many American deaths in Iraq. Anti-Trump Democrats are arguing that Soleiman's death will exacerbate our already tense relationship with Iran and could trigger a major war. Iran's leaders are already threatening retaliation.
Wall Street and the DOW responded to this news with a huge 233 point drop. As equities fell, commodity prices surged up significantly. Not surprisingly, crude oil surged to a new weekly high of $64.09 (Feb. contract chart). Silver, and especially gold prices also jumped. But by the end of the day, several of these markets (silver, crude) had pulled back. We will have to wait to see if this news will have a longer-term effect on these markets. It will depend on whether or not Iran wants to escalate its response beyond "saber-rattling". We were going to watch next week's reversal zone (Jan. 7 - 16) for a possible top in the broad stock market. If U.S./Iran tensions escalate next week, we might see a cycle bottom instead.