Oil climbed above $70 because the United States and Iran decided to shoot at each other again. Traders panicked about supply disruptions from the Middle East. The Middle East supplies oil. This has been true since before your grandfather bought his first barrel at $3.
Every single time these two countries lob missiles at each other, oil rips higher. Every single time, some retail genius acts like he just cracked the Da Vinci Code. "Did you know Iran sits near the Strait of Hormuz?" Yes, Derek. We all knew that. The strait has been there for several million years. Twenty percent of global oil passes through it daily. This is not insider information.
The technical picture says oil was already coiling at support. The chart screamed "ready to rip" for three weeks. But charts require patience and discipline. Much easier to wait for CNN to explain why you should have bought last Tuesday. Then chase it up here. Then sell it when some diplomat tweets about de-escalation talks. Then buy it back higher when those talks collapse. Repeat until broke.
The headline treats this like breaking news. It is not breaking news. The U.S. and Iran have hated each other since 1979. They will continue hating each other long after you close your Robinhood account. Oil will spike every time they remember they hate each other. You will pretend you saw it coming. You did not see it coming.
The correct trade was buying oil when it dipped below $68 two weeks ago on pure technical support. The incorrect trade was reading this headline, feeling smart about geopolitics for the first time since high school, and market-buying crude futures with money you need for rent.
Iran will keep threatening tankers. The U.S. will keep launching "defensive strikes." Oil will keep whipping around. Your P&L will keep bleeding. But at least you can tell your friends you trade commodities now.
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