Crisis Repricing
After analyzing the market reaction to the Iran war, one thing is clear: 70% of markets are pricing in a major geopolitical shock while the rest aren't. This disconnect can't persist indefinitely. It will resolve one way or the other.
I see five scenarios for how this plays out.
Scenario 1: Full Crisis Repricing (35%)
War escalates. US equities finally catch down to what Asian markets, energy, and bonds are already pricing.
S&P drops 15%+ to align with KOSPI/Nikkei selloffs. VIX spikes to 40-50+. Options dealers forced to hedge aggressively. The narrative shifts from "US exceptionalism" to "nobody is safe."
This is the base case because the current pricing makes no sense. Eventually, reality wins.
Scenario 2: Grinding Stagflation (25%)
War neither escalates nor fades. It just continues.
Oil stays elevated at $85-100 indefinitely. The S&P drifts lower slowly—down 5-8% over months, not days. The Fed is paralyzed between rising energy inflation and weakening growth. VIX stays stuck at 25-35 for months. Gold ranges between $4,800-5,400, unable to break out either direction.
This is the frustrating scenario where markets stay confused and volatility persists without resolution.
Scenario 3: War Fades (20%)
Ceasefire or diplomatic breakthrough within 30-60 days.
Oil retreats below $75. KOSPI and Nikkei recover their losses. VIX fades back to 18. The S&P makes new highs. Gold stays flat or recovers slightly.
The market repricing reverses. Everyone who sold the shock looks wrong. US exceptionalism narrative gets validated retroactively.
I'm skeptical of this scenario because geopolitical conflicts rarely resolve this cleanly. But it's possible.
Scenario 4: Escalation Without Repricing (15%)
War escalates further—Iran counterattacks, Strait of Hormuz threatened, regional expansion—but the S&P still doesn't reprice.
US exceptionalism positioning holds. Tech stocks absorb everything. The narrative becomes "only US assets are safe" and money flows in despite worsening geopolitics.
This is the scenario where I'm completely wrong about market delusion. The divergence I called out in the last post just gets worse.
Scenario 5: Black Swan Escalation (5%)
Nuclear threat. China opportunistically moves on Taiwan. Saudi Arabia enters the conflict.
Complete regime change in risk pricing. Every correlation goes to 1. Everything sells simultaneously. Dollar spikes violently. Gold flushes hard initially, then becomes the only asset anyone trusts.
This is the tail risk scenario. Low probability, but you need to be aware it exists.
I'm tracking these levels daily to assess which scenario we're moving toward.
February 27, 2026
Day before war began - baseline
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | $67.02 | — |
| TTF | $31.96 | — |
| EQUITIES | ||
| SPX | 6,878 | — |
| NI225 | 58,850 | — |
| VIX close | 19.85 | — |
| VIX high | 21.74 | — |
| VVIX | 110.89 | — |
| CREDIT | ||
| HYG | 80.72 | — |
| FX | ||
| DXY | 97.723 | — |
| USDJPY | 156.066 | — |
| USDCHF | 0.76908 | — |
| BONDS | ||
| US 10Y | 3.949% | — |
| JP 10Y | 2.111% | — |
| DE 10Y | 2.644% | — |
| GB 10Y | 4.305% | — |
| OTHER | ||
| Gold | $5,247 | — |
| BTC | $65,929 | — |
Assessment: Baseline reading. Markets in normal regime before the shock.
February 28, 2026
Day 1 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | — | — |
| TTF | — | — |
| EQUITIES | ||
| SPX | — | — |
| NI225 | — | — |
| VIX close | — | — |
| VIX high | — | — |
| VVIX | — | — |
| CREDIT | ||
| HYG | — | — |
| FX | ||
| DXY | — | — |
| USDJPY | — | — |
| USDCHF | — | — |
| BONDS | ||
| US 10Y | — | — |
| JP 10Y | — | — |
| DE 10Y | — | — |
| GB 10Y | — | — |
| OTHER | ||
| Gold | — | — |
| BTC | $67,049 | +1.7% |
Assessment: Incomplete data. Weekend/limited trading.
March 1, 2026
Day 2 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | — | — |
| TTF | — | — |
| EQUITIES | ||
| SPX | — | — |
| NI225 | — | — |
| VIX close | — | — |
| VIX high | — | — |
| VVIX | — | — |
| CREDIT | ||
| HYG | — | — |
| FX | ||
| DXY | — | — |
| USDJPY | — | — |
| USDCHF | — | — |
| BONDS | ||
| US 10Y | — | — |
| JP 10Y | — | — |
| DE 10Y | — | — |
| GB 10Y | — | — |
| OTHER | ||
| Gold | — | — |
| BTC | $65,852 | −0.1% |
Assessment: Incomplete data. Weekend/limited trading.
March 2, 2026
Day 3 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | $71.23 | +6.3% |
| TTF | $44.505 | +39.2% |
| EQUITIES | ||
| SPX | 6,881 | +0.04% |
| NI225 | 58,057 | −1.3% |
| VIX close | 21.43 | +8.0% |
| VIX high | 25.24 | +16.1% |
| VVIX | 113.44 | +2.3% |
| CREDIT | ||
| HYG | 80.28 | −0.5% |
| FX | ||
| DXY | 98.548 | +0.8% |
| USDJPY | 157.360 | +0.8% |
| USDCHF | 0.77942 | +1.3% |
| BONDS | ||
| US 10Y | 4.036% | +8.7bps |
| JP 10Y | 2.065% | −4.6bps |
| DE 10Y | 2.719% | +7.5bps |
| GB 10Y | 4.377% | +7.2bps |
| OTHER | ||
| Gold | $5,311 | +1.2% |
| BTC | $68,947 | +4.6% |
Assessment: The divergence begins. TTF up 39%, WTI up 6%, but S&P barely moved (+0.04%). VIX climbing but not exploding. This is exactly the split I described in the last post—energy markets pricing war, equities ignoring it. Not yet clear which scenario we're in.
March 3, 2026
Day 4 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | $74.56 | +11.2% |
| TTF | $54.290 | +69.9% |
| EQUITIES | ||
| SPX | 6,710 | −2.4% |
| NI225 | 56,279 | −4.4% |
| VIX close | 23.56 | +18.7% |
| VIX high | 28.15 | +29.5% |
| VVIX | 116.02 | +4.6% |
| CREDIT | ||
| HYG | 80.12 | −0.7% |
| FX | ||
| DXY | 99.071 | +1.4% |
| USDJPY | 157.694 | +1.0% |
| USDCHF | 0.78199 | +1.7% |
| BONDS | ||
| US 10Y | 4.065% | +11.6bps |
| JP 10Y | 2.151% | +4.0bps |
| DE 10Y | 2.750% | +10.6bps |
| GB 10Y | 4.477% | +17.2bps |
| OTHER | ||
| Gold | $5,123 | −2.4% |
| BTC | $68,284 | +3.6% |
Assessment: TTF now up 70% from baseline. S&P finally cracks (-2.4%). Nikkei down 4.4%. VIX intraday high hits 28. The repricing is starting. This looks like early stage Scenario 1 (Full Crisis Repricing). Gold weakness is bizarre—down 2.4% during a war.
March 4, 2026
Day 5 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | $74.66 | +11.4% |
| TTF | $48.765 | +52.6% |
| EQUITIES | ||
| SPX | 6,869 | −0.1% |
| NI225 | 54,245 | −7.8% |
| VIX close | 21.14 | +6.5% |
| VIX high | 24.87 | +14.4% |
| VVIX | 106.94 | −3.6% |
| CREDIT | ||
| HYG | 80.40 | −0.4% |
| FX | ||
| DXY | 98.775 | +1.1% |
| USDJPY | 157.054 | +0.6% |
| USDCHF | 0.77916 | +1.3% |
| BONDS | ||
| US 10Y | 4.100% | +15.1bps |
| JP 10Y | 2.117% | +0.6bps |
| DE 10Y | 2.764% | +12.0bps |
| GB 10Y | 4.441% | +13.6bps |
| OTHER | ||
| Gold | $5,134 | −2.2% |
| BTC | $72,752 | +10.4% |
Assessment: Whipsaw. TTF pulls back sharply to +53%, S&P recovers almost all losses (-0.1% from baseline), VIX drops back to 21. Nikkei continues bleeding (-7.8%). This is confusing action. Either war fears fading (Scenario 3) or US equities refusing to reprice (Scenario 4). Too early to tell. BTC rally to $72k is strange.
March 5, 2026
Day 6 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | $81.01 | +20.9% |
| TTF | $50.730 | +58.7% |
| EQUITIES | ||
| SPX | 6,830 | −0.7% |
| NI225 | 55,271 | −6.1% |
| VIX close | 23.76 | +19.7% |
| VIX high | 25.84 | +18.9% |
| VVIX | 115.93 | +4.5% |
| CREDIT | ||
| HYG | 80.08 | −0.8% |
| FX | ||
| DXY | 99.061 | +1.4% |
| USDJPY | 157.558 | +1.0% |
| USDCHF | 0.78103 | +1.6% |
| BONDS | ||
| US 10Y | 4.140% | +19.1bps |
| JP 10Y | 2.146% | +3.5bps |
| DE 10Y | 2.837% | +19.3bps |
| GB 10Y | 4.545% | +24.0bps |
| OTHER | ||
| Gold | $5,078 | −3.2% |
| BTC | $70,807 | +7.4% |
Assessment: Oil spikes to +21%. S&P gives back gains (-0.7%). VIX back up. Credit (HYG) weakening. This feels like Scenario 2 (Grinding Stagflation) emerging—oil staying elevated, equities drifting lower, no clean resolution. Gold down 3.2% from baseline during a war is still incomprehensible to me.
March 6, 2026
Day 7 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | $90.90 | +35.6% |
| TTF | $53.385 | +67.0% |
| EQUITIES | ||
| SPX | 6,740 | −2.0% |
| NI225 | 55,620 | −5.5% |
| VIX close | 29.48 | +48.5% |
| VIX high | 29.93 | +37.7% |
| VVIX | 140.44 | +26.6% |
| CREDIT | ||
| HYG | 79.69 | −1.3% |
| FX | ||
| DXY | 98.855 | +1.2% |
| USDJPY | 157.822 | +1.1% |
| USDCHF | 0.77598 | +0.9% |
| BONDS | ||
| US 10Y | 4.138% | +18.9bps |
| JP 10Y | 2.170% | +5.9bps |
| DE 10Y | 2.864% | +22.0bps |
| GB 10Y | 4.641% | +33.6bps |
| OTHER | ||
| Gold | $5,158 | −1.7% |
| BTC | $68,170 | +3.4% |
Assessment: This is the data I analyzed in the last post. Oil +36%, TTF +67%, S&P -2%, VIX spikes to 29.48, VVIX at 140. Peak stress so far. Credit breaking (HYG -1.3%). This is either late-stage Scenario 2 or early Scenario 1. The market delusion is becoming untenable.
March 7, 2026
Day 8 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | — | — |
| TTF | — | — |
| EQUITIES | ||
| SPX | — | — |
| NI225 | — | — |
| VIX close | — | — |
| VIX high | — | — |
| VVIX | — | — |
| CREDIT | ||
| HYG | — | — |
| FX | ||
| DXY | — | — |
| USDJPY | — | — |
| USDCHF | — | — |
| BONDS | ||
| US 10Y | — | — |
| JP 10Y | — | — |
| DE 10Y | — | — |
| GB 10Y | — | — |
| OTHER | ||
| Gold | — | — |
| BTC | $67,287 | +2.1% |
Assessment: Incomplete data. Weekend.
March 8, 2026
Day 9 of war
| Ticker | Level | Δ% from baseline |
|---|---|---|
| ENERGY | ||
| WTI | — | — |
| TTF | — | — |
| EQUITIES | ||
| SPX | — | — |
| NI225 | — | — |
| VIX close | — | — |
| VIX high | — | — |
| VVIX | — | — |
| CREDIT | ||
| HYG | — | — |
| FX | ||
| DXY | — | — |
| USDJPY | — | — |
| USDCHF | — | — |
| BONDS | ||
| US 10Y | — | — |
| JP 10Y | — | — |
| DE 10Y | — | — |
| GB 10Y | — | — |
| OTHER | ||
| Gold | — | — |
| BTC | $65,975 | +0.1% |
Assessment: Incomplete data. Weekend.