Iran attacks reignite inflation fears and spike oil — go long energy producers
Created
Thesis
The US military has carried out new strikes on Iran and blocked their oil sales, causing oil prices to surge immediately. This geopolitical crisis is panicking the broader market, sending stock futures tumbling after Trump declared the ceasefire 'over'. The connection here is inflation: as oil prices spike, global bond markets are already sliding because investors fear a renewed wave of inflation. Higher energy prices directly boost the revenues of oil majors, making energy stocks a classic safe haven when conflict disrupts supply chains.
Strategy approach
Construct a momentum-rotation strategy going long the Energy Select Sector SPDR Fund (XLE) on the daily timeframe (D1). Entry: Buy XLE when crude oil futures (CL=F) make a 5-day high and the S&P 500 (SPY) drops 1% on the same day. Exit: Sell if XLE loses its 10-day moving average, or enforce a 7% hard stop loss.
Markets and timeframes
What this public preview can establish
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