Oil prices fell on Monday after Donald Trump called off a planned strike on Iran. Traders spent the weekend pricing in World War III. They woke up to a tweet saying never mind.
The geopolitical risk premium evaporated faster than a day trader's confidence during power hour. Brent crude dropped because the bombs that were definitely going to fall decided not to fall. This is how grown adults with Series 7 licenses spend their time. They add three dollars to oil because maybe we'll start a war. They subtract three dollars because maybe we won't.
Somewhere a technical analyst pulled up his charts and drew a line connecting Trump's thumb to the tweet button to the price of West Texas Intermediate. He labeled it the Presidential Impulse Indicator. His boss promoted him.
The funniest part is pretending any of this mattered. Oil was going to do whatever oil was going to do. Iran was still in the Gulf. Trump was still Trump. The only thing that changed was which fantasy investors decided to believe for 72 hours. Last week the fantasy was explosions and supply shocks. This week the fantasy is stability and diplomatic restraint from a guy who picked trade policy fights with Canada.
Retail traders who bought crude futures Friday night because they read a Bloomberg push notification got to experience what professionals call price discovery. Professionals call it that because "you got f*cked by headlines you can't predict" doesn't sound technical enough for client presentations.
The strike was called off. The premium disappeared. The charts reset. And absolutely nobody learned that trading the news is just gambling with extra steps and a Wall Street Journal subscription.
Photo by sina drakhshani on Unsplash
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