Middle East chaos chokes off oil supply — load up on energy stocks
Thesis
The U.S. has directly struck over 80 sites in Iran and revoked oil sales waivers, fundamentally shifting the geopolitical landscape. News that tankers are barely moving through the critical Strait of Hormuz indicates a real, physical constraint on global oil supply. When you combine this supply shock with the news that German bond yields just hit 3% on renewed inflation fears, the market is signaling higher energy prices ahead. We want to own oil producers and energy ETFs to capture this momentum.
Strategy approach
Build a rule-based strategy that enters long USO on D1 when WTI crude oil futures gain >2.5% in a single session and the TDG (broader transportation/energy index) closes in the upper half of its 20-day range. Exit after 14 days or on a 6% trailing stop from the highest close.