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Geopolitical tensions are through the roof right now. Will Iran retaliate? Will they close the strategically important Straight of Hormuz? We could spend a lot of time guessing what could happen, but that's not likely to contribute to our portfolio’s bottom line.

I would like to remind readers that we saw energy prices make an important high back in 2022, not long after Russia’s invasion of Ukraine.

It was a true case of “buy the rumor, sell the news.” I can’t say whether that’s happening again this time, but we can certainly take stock of the current situation based on what’s leading. 

Check this out… 

A Dangerous Cocktail for Bulls

The energy sector is absolutely running the table in the near-term. It’s solidifying its place as the top-performing sector on a weekly and monthly basis, which raises the eyebrows for the bulls.

If this momentum continues, it could lead to volatility in stocks, but as I’ve been discussing in the TheoTrade Live Chat, there’s a chance that crude oil could be forming a multi-month high here too.

The real danger lies with the Fed moving to cut rates again with oil prices off the lows. This could add real fuel to an inflationary fire that kicks off a few months for now.

In the meantime, we’ll look for a revamp of the tech sector. I like what I’m seeing in chips still, so that’s a plus.

I’ll keep you posted,

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