ALERT: Irans Largest Oil Depot BOMBED!!!
In a Nutshell
Iran's largest oil depot was bombed, fueling a 30% surge in Brent oil to $92-93 with potential to hit $100+, driven by escalating US-Iran tensions; US oil fund jumped from $70 to $113, ideal for high-risk day trades but risky overnight due to possible quick reversals if resolved. Broader markets like NASDAQ remain resilient near highs despite sector hits in airlines (e.g., Delta, Southwest), materials, and consumer goods from rising fuel costs. Watch oil futures open tonight, upcoming CPI/GDP/PCE data; avoid leverage and prepare for volatility rather than predict outcomes.
These notes were generated by AI and may contain inaccuracies.
Oil is the talk of the week. Oil has had one of its best performing weeks in a very long time. The United States oil fund has gone from lows of $70 per share, beginning relatively from middle to late February trading around $75 per share, running up to highs of $113. If tensions within the US and the Middle East continue and these attacks continue to happen, especially targeting oil plants, oil prices will continue to rise.
Oil Trading Advice
For high-risk traders focusing on day trades to make money when direction is in favor, oil is a lucrative commodity to trade right now because it's very relevant. Is it a good investment at these levels? If there is a resolution between Iran and the US in any way, these oil prices will quickly retrace. That is where the risk falls. If this announcement is shared overnight and you carry a position overnight, this is why it's a high-risk trade and more of a day trade than an investment. You're an adult, you can do whatever you want. This sheds light on the opportunity but also on the risk.
Brent oil has seen about a 30% increase from middle to late February to now highs of $92 to $93. This is all before oil futures open with everything that's happened over the weekend. A whale has opened a $2 million oil short position today. If oil pumps up to $98.50 a barrel, he will get wiped out and liquidated because he's heavily leveraged at 9.26 leverage. Some crypto traders use up to 40x leverage, and TR platforms allow up to 100x leverage, but that's insane. Feel free to invest in any speculative asset, just don't use leverage. It's terrible especially when direction turns against you. Oil prices technically are overbought in the short term or long term, but if tensions continue between Iran and the US and more attacks happen, markets can stay irrational longer than we can stay solvent. Oil could pump higher to $100 a barrel or $110 a barrel.
Unprecedented times mean you need to make sure you're not afraid to take advantage of opportunities, but you also don't have to be overly aggressive.
Iranian TV correspondents report live from a bombed area in Iran with massive flames raging behind him. An area in Iran, an oil refinery or something like that, got hit. Oil prices are expected to gap up, especially because of this attack. Iran could respond in a more aggressive way. Things are escalating, tensions are rising, uncertainty is injecting itself. Just a few weeks ago, markets wanted to sweep this under the rug. The day after the attack, markets recovered and went back into the green, saying "This is just like Venezuela all over again." It was nothing like Venezuela, which made it difficult to digest especially if you're newer to the market. Markets gap down, recover, then gap right back down.
Broader Market Context
Overall markets although impacted by events overseas are not devastated. NASDAQ QQQ is not far from all-time highs and still incredibly bullish. QQQ has been consolidating for the past month to month and a half, boring, unable to break below 590 or above 620. No new lows since November 24th last year, trading within range in a slight descending pattern. Markets are not incredibly bullish nor incredibly bearish, just trading sideways.
Big tech companies have experienced individual solid retracements: Microsoft 29%, Tesla 21%, Meta 19%, Amazon 17%, Nvidia 19%, Alphabet (Google's parent company) 14%, Apple 12%. While overall markets or individual sectors might overreact, overall markets are doing just fine. There's not enough panic in this market. Panic exists in crypto and more speculative areas, but NASDAQ and S&P 500 are holding up very well.
Don't put yourself in a position you simply cannot tolerate. Look at the bigger picture. Markets are really not dropping lower, at least not yet. Markets have not gotten worse since late last year. Markets are more bullish than bearish. Although this has been a negative catalyst with attacks in Iran, overall markets have not been hugely negatively affected.
US stock market and oil futures open at 6:00 p.m. Eastern time today. If oil prices gap up, not just those going long on oil but companies negatively impacted when oil prices go up will be affected.
- February existing home sales report on Tuesday
- CPI report for February on Wednesday (plan to live stream)
- US Q4 GDP report on Friday
- PCE inflation report (Federal Reserve's favorite measure of inflation) on Friday
- Jolts (job openings) on Friday
All eyes on oil prices tonight. The big focus is oil.
Sectors Impacted by Rising Oil Prices
While oil prices rise, airlines, materials, and consumer goods stocks drop first. Airlines: American Airlines, JetBlue, Southwest, Delta Airlines have seen solid retracements based on these attacks. If there's a resolution, they could quickly recover, but if oil prices skyrocket, they experience another downturn because fuel costs make up 20 to 30% of airline expenses. Materials and chemicals face margin pressure. Consumer goods squeezed by inflation.
When oil prices soar, watch for red screens in airlines, materials, and consumer goods. These sectors pay the price first. Once the rally on oil is done, if a resolution happens, these will begin to recover. Our job is not to predict but to prepare.
If you like the way things are broken down and sharing different ideas, especially within live trading sessions with the LPP team, I trade live every morning, including tomorrow. Tune in, click the second link in the description, learn more about the LPP team and see if it's a good fit. Hope that earned a thumbs up. Please consider subscribing. Let's end the year on a green note.
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