The Guns Went Quiet At Eight O’Clock. Dementia Donny Did It Again.

Well. Dementia Donny and the great TACO trade has gone and done it again.

At eight o’clock on Tuesday evening, the most consequential deadline in modern financial history quietly expired without a bomb being dropped. Pakistan’s prime minister brokered something few expected: a two-week ceasefire, and with it conditional reopening of the Strait of Hormuz.

The actual rockets stayed grounded. The carpet bombing back to the stone age is, unsurprisingly, another idle threat. The TACO delivers again.

Markets? S&P futures leapt 2.5%. Nasdaq rocketed 3.3%. Dow spiked over 1,000 points. VIX shed nearly 20%. Oil – trading near $113 as recently as Tuesday’s close – cratered more than 16% overnight. WTI fell to around $94. Gold is up like a rocket. ES futures are up like a rocket.

Thanks Donny.

The bullish bias suggested has indeed come to fruition – and obviously with a little TACO boost. The big takeaway is straight open and a two-week ceasefire which the markets are loving.

VIX has dropped through the 22 level which we noted a few weeks ago as potentially pivotal. I will be assessing whether the rising trendline is still holding VIX up. But I think it is fair to say that the markets may well have bottomed. We were almost 10% down on all the main indexes:

ES -9.7% / NQ -12.4% / YM -10.9% / RTY -12.1%

I thought we might see a little more – but we are definitely out of the crash window. This was not a crash or correction from a speed of movement standpoint. And since Uncle Buffett is sitting on his biggest cash pile ever, there may still be something in the wind to sniff out still later on. But as a short-term trader and not an investor – the short term is bullish.

SPX left yesterday breaking out of its tight range, as did RUT. We should be popping 150 points or so higher on SPX assuming the overnight move holds – which it should.

Market Briefing:

Wednesday 8 Apr – ceasefire morning.

• Eight PM ET Tuesday: Pakistan brokered two-week ceasefire / Hormuz conditionally reopening

  • TACO Instance 849 / carpet bombing threat confirmed as idle

  • S&P futures +2.52% to 6,824 / Nasdaq +3.28% / Dow +1,107 points / Russell +3.70%

  • VIX -20% to 20.63 / through the 22 level flagged as pivotal weeks ago

• Oil overnight crash:

  • WTI -16% to $94 / Brent followed / largest single-session oil drop in nearly six years

  • Still 30% above pre-war level / Strait reopens slowly / infrastructure damaged / two weeks is not a peace deal

• Gold +3.40% / Asian markets surged: Nikkei +4.5%, Kospi +5.5%

• Wednesday data: Delta Air Lines Q1 at 10am ET ($400m fuel hit / EPS consensus $0.59) / FOMC minutes 2pm ET

• Friday: March CPI – first to capture the full oil-shock / JPMorgan projects 3.4%

• Wednesday read: bullish / SPX broke out of tight range / 150 points higher anticipated / TnT flipped bullish / VIX through 22 / may have seen the market bottom

Market Snapshot

• ES: 6,837.75 / +174.25 (+2.61%) / ceasefire rocket

• YM: 47,978 / +1,107 (+2.36%) / Dow recovery

• NQ: 25,227.75 / +828.50 (+3.40%) / tech leading the relief

• RTY: 2,657.10 / +91.20 (+3.55%) / Uncle Russell joining the party

• GC: 4,829.90 / +96.60 (+2.04%) / gold up like a rocket

• CL: 94.94 / -15.40 (-13.96%) / war premium unwinding / WTI -16% overnight

• VIX: 20.28 / -5.49 (-21.30%) / through 22 / watching the rising trendline

• BTC: 71,804.19 / +1.34% / broke above $71K / shorts $427m liquidated

Tag ‘n Turn

SPX flipped bullish above 6,618. RUT is flat awaiting a fresh setup. Both broke out of their tight ranges yesterday. The continuation thesis from the 30-year study and the TACO catalyst are now aligned.

The BB pinch that had been building all week released on the TACO news. SPX broke cleanly above 6,618 and the TnT flipped bullish with a target of 6,625 – though given the overnight futures print of 6,837 that target will be absorbed immediately at the open and price is likely heading considerably higher on the day. RUT is flat, awaiting a fresh setup as the bullish flip processes. The 84% continuation study has played out. VIX through 22 confirms the regime shift. The short term is bullish.

SPX Analysis

Bullish above 6,618. Target 6,625 will be immediately absorbed at the open. 150 points higher on SPX is the anticipated move assuming the overnight holds.

The tight range that had been building since Monday – the equilibrium point, the BB pinch, the MACD-v bullish extreme – resolved cleanly to the upside on the ceasefire news. SPX is in a confirmed bullish TnT above 6,618 with a target of 6,625. Given overnight futures at 6,837, the immediate target is well through price by the open – the continuation from the 84% study suggests further upside from the breakout level. The positive GEX environment from the past week now has a directional catalyst behind it.

Current Status: Bullish Above 6,618 / PFZ 6,534 / Target 6,625 – likely extended significantly at the open

RUT Analysis

Uncle Russell is flat awaiting a fresh setup after the bullish flip processes. Futures +3.55% suggests the new setup will not be far away.

RUT printed flat on Tuesday as the TnT processes between signals. With RTY futures up 3.55% overnight, the open will push price well above the previous tight range. A fresh bullish setup will likely emerge as the session establishes. The same logic as SPX applies – the continuation from the squeeze has been validated by the TACO catalyst. Uncle Russell should be joining the party fully once the morning establishes direction.

Current Status: Flat – Awaiting Fresh Setup / PFZ 2,540 / Target Pending

Rounding Off

The TACO Delivers Again Eight PM ET. Pakistan brokered the pause. The Strait conditionally reopens. The carpet bombing was another idle threat. TACO Instance 849 confirmed. The pattern: Trump makes an extreme threat, markets panic, markets recover, the threat evaporates. This iteration had a more genuine-feeling resolution than most – Pakistan’s brokered ceasefire is more substantial than a Truth Social post – but two weeks is not a peace deal. The Strait reopens slowly, infrastructure has been damaged, and the underlying conflict has not been resolved. Analysts are clear-eyed. The war premium unwinds first, the fundamental reckoning follows.

The Bottom ES -9.7%, NQ -12.4%, YM -10.9%, RTY -12.1% from highs. The crash window has closed – the speed of the move was not crash-like, and the VIX through 22 confirms the fear regime is transitioning. Uncle Buffett sitting on his biggest cash position ever is the background note worth remembering. The short-term is bullish. The medium-term still has questions.

This Week’s Remaining Events Delta Q1 earnings at 10am ET – the first airline to reveal the oil shock’s cost impact, with a $400m fuel hit flagged. FOMC minutes at 2pm ET – the Fed’s March thinking at 3.50-3.75% against the backdrop of what was then a full oil shock. March CPI Friday – JPMorgan projects 3.4% headline. That print was computed during the war. It does not yet capture the ceasefire oil reversal.

Oil WTI fell from $113 to $94 overnight. Still 30% above pre-war $71. The Strait reopening is conditional and gradual. Goldman’s Brent projections will be revised. The energy trade of the past six weeks is rotating aggressively. Energy longs and defense names face sharp reversals. Tech and consumer names recover.

Current Status: Ceasefire confirmed / TACO 849 / bullish / VIX through 22 / butterflies delivering / Delta 10am / FOMC 2pm / CPI Friday

Expert Insights

The past six weeks were the pessimism phase. ES -9.7%, VIX above 30, Moody’s recession model at 49%, carpet bomb threats dominating the news cycle. The bullish bias held throughout – not because the news was good, but because the chart, the GEX, and the 84% continuation study said the pendulum had swung far enough. Today the pendulum swings back. The intelligent framing: the ceasefire is real but two weeks is not a resolution. The optimism now arriving is not unjustified – but it is not the full story either. The process stays the same: follow the signal, manage the stop, let the trade run.

[Source: Benjamin Graham – The Intelligent Investor, Harper & Brothers, 1949, public domain]

1 – Pakistan’s role as ceasefire broker is geopolitically significant beyond the market-moving headline. Pakistan maintains diplomatic relations with both the United States and Iran, is a nuclear power, and has historical experience mediating Gulf conflicts. [Source: Pakistan Ministry of Foreign Affairs, public record | Reuters, Pakistan PM ceasefire announcement, 7 April 2026, public]. A ceasefire brokered by Pakistan carries more structural credibility than a Truth Social post or an unnamed diplomatic channel. The two-week framework is still a pause, not a resolution – but the broker matters for assessing how durable the pause is likely to be.

2 – Oil falling 16% overnight while gold rises 3.4% represents an unusual simultaneous move that reflects two different repricing processes happening at once. Oil is repricing the removal of the war premium – rational and expected. Gold rising simultaneously reflects continued uncertainty about the durability of the ceasefire and ongoing stagflation concerns. [Source: WTI crude price data, public | Gold spot price data, public | CME futures data, public]. A fully resolved conflict would see gold fall alongside oil. Gold rising while oil falls suggests the market is pricing a temporary pause rather than a permanent resolution. The two-asset divergence is the honest read on how much of the rally is real versus borrowed time.

3 – The FOMC minutes at 2pm ET today were written during the peak of the oil shock when Brent was above $110 and rate hike odds were above 50%. Those conditions no longer fully apply as of this morning. [Source: Federal Reserve, FOMC meeting March 2026, public | CME FedWatch data, public]. The minutes will therefore provide a backward-looking view of Fed thinking that is already partially obsolete. The more relevant question is how quickly the FOMC’s assessment shifts given the oil reversal. The April 28 meeting is the first opportunity for an official repricing. CPI Friday provides the data to inform that repricing.

Beep.

In Other News…

At eight o’clock on Tuesday evening, Pakistan’s prime minister announced a two-week ceasefire between the United States and Iran. The Strait of Hormuz will conditionally reopen. Trump’s carpet bombing threats expired without a carpet bomb.

TACO Instance 849.

Oil fell 16% overnight. The single largest session drop in nearly six years. WTI is at $94. Brent followed. Gold is up 3.4%. Asian markets surged – Nikkei +4.5%, Kospi +5.5%. S&P futures added 2.5%. Nasdaq added 3.3%. The Dow added over 1,000 points. VIX fell nearly 20% through the 22 level.

Two weeks is not a peace deal. The Strait reopens slowly. Infrastructure has been damaged. The underlying conflict has not been resolved. Analysts are using phrases like “borrowed time” and “conditional pause” rather than “resolution.” The market is choosing to focus on the pause rather than the conditions. This is the market’s right.

Delta Airlines reports Q1 this morning, with a $400m fuel hit already flagged. They are the first carrier to show the oil shock’s cost in earnings format. FOMC minutes arrive at 2pm ET. CPI on Friday will show what inflation looked like during the war. The ceasefire came after the survey period.

Fun Fact:

Pakistan has served as a diplomatic back-channel between the United States and Iran on multiple occasions since the 1979 Islamic Revolution severed direct diplomatic relations between Washington and Tehran.

Without formal US-Iran ties, third-party brokers have historically included Switzerland (which represents US interests in Iran through its embassy in Tehran), Oman, Qatar, and on several occasions Pakistan. Pakistan’s unique position – a nuclear-armed state with close ties to both the United States through security cooperation and to Iran through geographic proximity and shared regional interests – makes it one of the few credible intermediaries in this specific diplomatic corridor.

The ceasefire announced Tuesday night is not the first time Islamabad has quietly solved a problem that Washington and Tehran could not solve directly.

[Source: Council on Foreign Relations – US-Iran Relations history, cfr.org – public |
Brookings Institution – Pakistan as regional broker, brookings.edu – public]

Trade well,
T2 Markets

p.s. Want full access to the SPX Income System (includes 7+ mechanical income strategies)? Join our team now!

p.p.s. Want funding to DAY TRADE our options strategies? Discover how you can start trading with up to $250k of RISK FREE capital!