U.S. strikes Iran and oil spikes while tech crumbles — short the Nasdaq as energ
Thesis
The news that the U.S. struck Iran after a ceasefire violation in the Strait of Hormuz is pushing oil prices sharply higher as traders worry about global shipping disruptions. This spike in energy costs couldn't come at a worse time for the stock market: tech stocks are already getting hammered, with the Nasdaq sliding amid a massive sell-off in AI favorites like Micron and Nvidia. Rising oil prices act as a massive tax on the global economy and specifically threaten tech companies that require massive amounts of electricity for AI data centers. The combination of an existing tech rout and a sudden geopolitical oil shock creates a perfect storm for lower stock prices.
Strategy approach
Build a rule-based strategy that enters short QQQ on D1 when Brent Crude Oil (BZ=F or CL=F) rallies more than 3% in a single session and QQQ is trading below its 10-day moving average. Exit the position if oil prices reverse and drop 3% from the entry date, or if QQQ bounces back above its 10-day moving average. Maximum hold time of 14 days.