Most traders are looking at charts right now. But this is one of those moments where the chart is not the full story. What is happening globally right now has the power to move the market before your setup even forms. If you do not
understand the context, you will be reacting instead of executing.
Let’s break down the three biggest stories you need to know before the market opens this week.
1. U.S. and Iran Tensions Are Targeting Global Oil Supply
The biggest story right now centers around the Strait of Hormuz. This is one of the most important shipping routes in the world. Roughly 20 percent of global oil flows through this narrow passage.
Donald Trump has announced a potential U.S. blockade after failed negotiations with Iran. At the same time, Iran has already been restricting access and warning of retaliation.
What this means
This is not just political tension. This is a direct threat to global oil supply. When oil supply is threatened, prices rise. When prices rise, inflation fears increase. And when inflation becomes a concern, the market reacts fast.
What traders should expect
• Energy stocks may move higher
• Tech and growth stocks may come under pressure
• Overall market could open with volatility and sharp moves
Fig 1 -
CVX (Chevron - Energy) Weekly CHARTSpent 3 years in consolidtion, long overdue for the breakout we just had.
2. Rising Energy Costs Could Pressure the Entire Economy
With the potential for a prolonged conflict, energy prices may not just spike. They may stay elevated. Higher fuel costs affect everything:
• Transportation
• Goods and services
• Consumer spending
This creates pressure across the entire economy.
What this means
When people spend more on gas and essentials, they spend less elsewhere.
That slows down economic growth and puts pressure on companies.
What traders should expect
• Consumer stocks may weaken
• Airlines and transportation may drop
• Energy sector may continue to lead
The key here is not just the move. It is the shift in sentiment toward risk.
Fig 2 - BBY (Best Buy - Consumer Cyclical) Weeky Chart
Look how $62.26 has been holding as support since Aug 2017, if it breaks, that could be major.
3. Global Tensions and Trade Uncertainty Are Rising
There are also growing signs of misalignment between the U.S. and its allies, including tensions involving airspace restrictions and cooperation with Europe and Canada.
When global relationships become strained, it creates uncertainty in trade, policy, and economic direction. Markets do not like uncertainty.
What this means
This type of environment often leads to:
• Reduced risk appetite
• Increased volatility
• Shifts into safer assets like gold
What traders should expect
• Potential weakness in global markets
• Strength in safe haven assets like the dollar or gold
• Choppy price action across indices
Fig 3 - Gold - (Safe Heaven during Uncertainty) Weekly Chart
Gold has risen 4000 points since Oct 2022, this is it's first major pullback since then.
What This Means for You as a Trader
Today and tomorrow may not be a normal trading day. You are not just trading patterns. You are trading reactions to global events. That changes how you need to show up.
Most traders lose money in environments like this because they try to force their usual strategy onto an unusual market. Do not do that. Take your time and wait for the market to let you know what it wants to do. Do not chase price. You will always get another opportunity.
The past two weeks we have moved up quickly on a pullback, let’s see if we continue up this week or if the events mentioned above will stop the pullback in its tracks.
How to Approach the Market This Week
Keep it simple.
• Wait for confirmation
• Let the market show direction first
• Avoid jumping in at the open without a clear setup
• Understand that volatility is not opportunity unless it fits your plan
Your job is not to predict. Your job is to execute when conditions align.
Final Thought
Most traders lose more money reacting to news than they do from bad setups. This week is where patience will pay off.
If you can stay disciplined, wait for structure, and trade what is actually happening instead of what you think should happen, you put yourself in position to win.
