Greedful, if Israel only nukes Iran, I don't agree that all HLLLL would break loose in the markets; other than for oil, gold, oil stocks, and gold stocks shooting through the roof. Now if Israel's action immediately causes a full scale Middle East or World Wide war, then I agree that all markets everywhere would be wrecked. But I don't expect Israel striking Iran to be a surprise to anyone and I also don't think any other country inm the Middle East to have the resources or fortutude to strike back at Israel after Israel's bold move; and I also don't think the world "powers" like the US, China, and Russia would retaliate for Iran and strike Israel. Iran is a despotic nation and most around the world would be glad the problem is solved.
The stock market would crash if Israel attacked Iran. Bank on it.
If the required rate of return on the 490 odd stocks in the S&P 500 unrelated to oil doubled because of the war, and crashed 50% to reflect the doubling, the other 10 would lose half their value unless the market believed their earnings were going to be twice as much thanks to the war. Nobody is going to buy an oil company whose shares only offer X% when they can get 2X% from another stock that has dropped 50% to factor in more risk.
Most of the value of oil stocks is not coming from the profit they earn in the next 6 months or year, either, it is based on expectations of profit over the coming decades. A middle east war that throws the entire world economy into an other Great Depression will not be helpful to those expectations.
I suggest you research production sharing contracts and the tax structure oil companies face with rising oil prices too. If you prefer the company annual reports look at those as well. You will find they pay higher and higher taxes and shares of revenue the higher the oil price goes. That is by design. The oil companies have bargained away most of their rights to profit from extremely high oil prices to assure themselves a higher rate of return at moderate oil prices which their risk modelers take as far more likely. This is why Exxon Mobil is not making more money at $110 than it was at $65/$70 just a few year ago. Indeed, it is probably make substantially less as it is costing them far more to replace a barrel of oil now in development costs than it did only several odd years ago...
If you want to gamble on oil buy oil, not oil stocks. The same applies to gold.
I don't think there will be a war though. Obama will not allow one. He proved who was in charge in the Gaza offensive when he ordered Bibi to back off and Bibi said Yes Sir!!
I covered the shorts already. The strategy of diversifying into the unknown of the Fed helped cushion the adverse price move early in the day, and when it was clear XOM was the speculator's favorite, concentrating against it made it made easy to clear out with a small gain by close. The euro move was gravy.
If Israel nukes Iran Exxon Mobil would drop by about 50% in a week, assuming you could even trade it at all. The selling in stock indexes, mutual funds, and panicking pensions would totally overwhelm the small buffer of real buyers in the market and there would be no floor.
Exxon Mobil would not make money on a nuclear war either. It does not have enough oil for its refineries and would face enormous losses on them. It still must pay its pensions whether of not its investments cover them too. It faces windfall profits taxes on almost all its international fields, and cannot make much more profit than it is getting now no matter what the oil price is. It would find its operations in Qatar either destroyed or nationalized by the government there, and its UAE operations would see a similar fate. It would face price controls and rationing in the USA and Europe...
Oil would shoot up and then collapse when the banking runs and stock market crash overwhelmed the supply disruption and permanently lowered oil demand.
sitting in cash appeals to me at the moment. I pick and choose my targets of opportunity.