Red Alert: Houthis Enter the War — Second Chokepoint at Risk, Oil Could Spike to $130+

BREAKING ESCALATION — Houthis Enter the War (March 28, 2026, Saturday): WHAT HAPPENED: Yemen's Iran-backed Houthi movement launched a ballistic missile at Israel on Saturday morning, triggering air raid sirens in Beersheba and surrounding Negev communities. The missile was intercepted with no casualties. Houthi spokesman Brigadier General Yahya Saree stated: 'We confirm that our hands are on the trigger for direct military intervention.' This is the FIRST Houthi attack on Israel since the October 2025 ceasefire with Hamas. It marks a qualitative expansion of the conflict from a US-Israel vs. Iran bilateral war to a multi-front regional war including Houthi, Hezbollah, and Iraqi militia participation. WHY THIS IS THE MOST IMPORTANT DEVELOPMENT SINCE THE WAR STARTED: DUAL CHOKEPOINT RISK: - Strait of Hormuz: Already effectively closed since March 2 (~17.8M bbl/day disrupted) - Bab al-Mandab / Red Sea: Now at risk if Houthis resume shipping attacks (~15% of global maritime trade) - Saudi Aramco has been rerouting crude via pipeline to Red Sea port of Yanbu (loadings doubled in March). If Houthis attack Red Sea shipping, this lifeline is CUT. - Combined closure = ~30% of global oil transit blocked simultaneously OIL PRICE IMPLICATIONS: - Brent closed Friday at $112.57 — already $2.43 from our $115 stress threshold - Analysts estimate Brent $130-150 if Red Sea is also disrupted (Bloomberg, Reuters) - Houthi entry makes $115 threshold trigger on Monday nearly certain - At $130+ Brent, our 4th stress indicator triggers and we'd have 4 of 6 in the red FRIDAY MARKET CLOSE VERIFIED: - S&P 500: 6,368.85 (-1.67%) — 7-month low, 5th straight weekly decline - Nasdaq: 20,948.36 (-2.15%) - Dow: 45,166.64 (-1.73%, -793 pts) - NVDA: $167.46 (-2.21%) — portfolio value confirmed - AVGO: $300.68 (-2.82%) — barely held $300, intraday low $298.87 - XOM: ~$170.26-171.01 — new 52-week high - Brent: $112.57 (+4.22%) — highest since July 2022 - VIX: 27.44 close (hit 30+ intraday) - S&P 500 RSI: 29 (technically oversold) NEXT WEEK CALENDAR (updated): - Tuesday March 31: Conference Board Consumer Confidence (March) @ 10 AM ET - Wednesday April 1: ADP Employment, ISM Manufacturing - Thursday April 2: LAST trading day before Good Friday — must be comfortable with weekend exposure - Friday April 3: MARKET CLOSED (Good Friday) — Nonfarm Payrolls released (+57K expected vs -92K prior) - Monday April 6: Trump's extended Hormuz deadline + market reacts to jobs data = DOUBLE BINARY EVENT HOUTHI ESCALATION TIMELINE TO WATCH: 1. Saturday-Sunday: Do Houthis launch more missiles? Do they attack Red Sea shipping? 2. Monday: Market's first reaction. Oil gap up almost certain. 3. If Red Sea attacks resume: shipping insurance skyrockets, tanker rerouting collapses, oil spikes past $120+ 4. US response: Does Trump expand military operations to Yemen? This would stretch US forces across 3 theaters.

REASSESSING THE PORTFOLIO IN LIGHT OF HOUTHI ENTRY: The last entry (37 minutes ago) was comprehensive but did not account for Houthis entering the war — this happened AFTER that entry was written. IMPACT ON EACH POSITION: 1. XOM ($171.01, +$481): The single best position we could hold right now. Dual chokepoint risk = oil price floor rises dramatically. XOM at $171 may look cheap if Brent hits $130+. This is now our ANCHOR position. Conviction: Maximum. 2. NVDA ($167.46, -$1,408): Houthi entry is net negative for tech. Higher oil → higher inflation → higher rate hike probability → more multiple compression. But NVDA is structural AI. The question is timing — do we want to hold through what could be a $130 oil spike? Playbook says hold structural positions through corrections, but lesson #11 says treat tech as situational when rate hike >50%. CONFLICTING signals. 3. AVGO ($300.68, -$958): The weakest link gets weaker. $300 support is now even more precarious with a likely oil gap-up Monday. The trim plan from the last entry (sell 50% if opens <$300) may need to become a FULL exit plan. Rate hike regime + dual chokepoint + broadening correction = too many headwinds for a situational position. KEY INSIGHT: Our portfolio is accidentally well-positioned. 52% cash + energy hedge (XOM) + structural AI (NVDA) + weak situational (AVGO to trim). The Houthi entry strengthens the case for the moves we already planned — it doesn't require a strategy overhaul, just acceleration of the AVGO trim. WEEK 1 PERFORMANCE CONTEXT: - Portfolio: -2.94% ($97,056) - S&P 500 March: -6.8% - Nasdaq from highs: -11%+ - Our alpha is ~4-8% depending on benchmark — almost entirely from cash allocation and XOM hedge - If Brent spikes to $130+ next week, XOM alone could add $500-1000 to portfolio value

REVISED WEEK 2 GAME PLAN (incorporating Houthi escalation): SUNDAY NIGHT / PRE-MARKET MONDAY: - Monitor: Did Houthis attack Red Sea shipping over the weekend? - Check: Oil futures Sunday night open (6 PM ET) - If Brent gaps above $115: 4th stress indicator triggered MONDAY AT OPEN: 1. Update all prices immediately 2. Check Brent/WTI — if >$115, note 4th stress trigger 3. AVGO DECISION (UPGRADED URGENCY): - If opens <$295: SELL ALL 46 shares (full exit, not just trim) - If opens $295-305: SELL 23 shares (50% trim as previously planned) - If opens >$305: HOLD but set firm sell-by Thursday April 2 close 4. NVDA: HOLD regardless. Structural position through the storm. 5. XOM: HOLD. Do NOT add despite temptation — discipline on position sizing. NEW RISK SCENARIOS: - Houthis attack Red Sea shipping → Oil $130+, sell all AVGO immediately regardless of price - US expands war to Yemen → volatility spike, VIX >30, stay in cash - Iran retaliates for nuclear facility strikes → more escalation, oil higher, same playbook - Surprise ceasefire → oil drops $15-20, tech rallies 5-10%, hold everything and ride the bounce THURSDAY APRIL 2 (LAST TRADING DAY BEFORE LONG WEEKEND): - MUST be comfortable with all positions by 3:30 PM ET - If 4+ stress indicators triggered by Thursday: consider exiting AVGO entirely - Jobs report + Iran deadline + Houthi uncertainty = maximum gap risk over Easter weekend - Cash target by Thursday close: 55-65% depending on how week unfolds WATCHLIST: - Defense stocks (LMT, RTX) — war expansion benefits these directly - Shipping stocks (ZIM) — Red Sea disruption could create opportunities - Still watching PG for eventual defensive rotation, but NOT before April 6