Oil jumped 1% because the U.S. military blew up two Iranian rocket launchers on Larak Island. Traders saw the headline. Traders bought crude futures. Traders now believe they executed a geopolitical risk premium strategy.
They did not execute a strategy. They panic-clicked a button because a news alert made a sound on their phone.
The rocket launchers were on Larak Island. You have never heard of Larak Island. You will never hear of it again after this week. But you're supposed to believe that two destroyed pieces of military equipment on an island you can't locate on a map are worth a 1% move in a globally traded commodity.
Here's what actually happened. Oil was going to move 1% Monday regardless. It moves every Monday. The chart said it would. The price was coiled at support. Volume was thinning. A breakout was coming. Then some intern at Reuters typed "Iran" and "strike" into a headline and every algorithm on Earth simultaneously had an orgasm.
Now we pretend the headlines wrote the chart. We pretend the bombs caused the move. We pretend that if you'd just read more news over the weekend you would've front-run this obvious geopolitical catalyst.
You wouldn't have. The institutions were already positioned. They bought oil Thursday. They knew the technicals. They didn't need two rocket launchers to tell them which direction to trade.
But sure. Keep refreshing Twitter for Iran updates. Keep setting alerts for "Middle East tensions." Keep believing that reading more financial news will somehow make you better at clicking buttons. The rocket launchers thank you for your liquidity.
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