ExxonMobil and Chevron reported surging second-quarter profits on Friday. The cause was rising oil prices. The cause of rising oil prices was a war with Iran. Your neighbor who watches CNBC every morning just added XLE to his Robinhood account at all-time highs.
The technical setup here is flawless. Two ascending triangles. A golden cross on the weekly. RSI showing bullish divergence. Also there's a f*cking war happening that could escalate into a regional conflict killing thousands of people, but the 50-day moving average just crossed the 200-day so we're good.
Retail traders spent the weekend analyzing whether to buy the energy dip. They pulled up TradingView. They drew support and resistance lines. They calculated fibonacci retracements to the exact pip. Not one of them googled "Iran war casualties" or "Strait of Hormuz closure scenarios." Why would they? That's fundamental analysis, and fundamentals are for boomers who don't understand that markets are efficient.
Chevron's CEO probably sent a very somber internal memo about hoping for peace while his accountants literally popped champagne in the supply-demand modeling department. ExxonMobil's earnings call opened with thoughts and prayers, then pivoted to guidance revisions within ninety seconds. The analysts on the call nodded respectfully and upgraded price targets by 18%.
Here's what the chart doesn't show: geopolitical risk premium is just a fancy phrase for blood money with better PR. But retail doesn't care about that. Retail cares about whether the breakout holds above resistance. Retail wants to know if this is the dip to buy or the top to fade. Retail will lose money either way because they're trading obituaries like they're trading Pokemon cards, except Pokemon cards hold value.
The war could end tomorrow and crude could crater 40%, wiping out every bullish position opened this week. Or it could spread and double again. Your technical indicators can't tell you which. They can only tell you what already happened, in a format that makes you feel smart for losing money in new and exciting ways.
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