Peace in the Middle East — ride the relief rally on the S&P 500
Thesis
The peace agreement removes a massive source of global uncertainty that has been weighing on markets. When investors suddenly feel safer, they tend to rotate money out of safe-havens and into stocks. With oil prices dropping, the market is also pricing in a lower chance of inflation, which could mean the Fed stops hiking rates — another tailwind for stocks. We expect the S&P 500 to grind higher over the next several sessions as this optimism gets priced in.
Strategy approach
Build a rule-based strategy that enters long SPY on the 1-hour timeframe when price opens with a gap up > 1% from previous day's close and RSI(14) on H1 is between 55 and 70 (showing strong but not exhausted momentum). Exit conditions: take profit at 2% gain from entry, hard stop loss at 1.5% below entry, or time-based exit at end of 3 trading days.