A Look at How Recent Global Unrest has Impacted Energy Names.
Nowadays, there is no shortage of headlines and global events that constantly change the world’s investment landscape. Late evening action on 6/12 added further unrest to the middle east as Israel struck several Iran operated military and nuclear sites. While this is still a developing story/situation, it sent ripples across several different parts of the global markets, enough so that a handful of technical developments emerged worth noting in today’s report. It goes without saying our research aims to take an emotionless view, strictly focusing on price action resulting from current events.
As with other periods of unrest/uncertainly in the middle east, the first/most impacted area is the energy space. Within hours of the initial headlines, Crude Oil CL/ had jumped as much as 13%+ into the mid-$70’s, moving well past its bearish resistance line at and around current levels on its default chart. While price action cooled off throughout market action on 6/13/2025 into the low-$70’s, the upside action should be significant enough to push the commodity back into a positive trend on its default chart. This will heavily impact the “at a first glace” commentary for the broader energy space, but only time will tell if the unrest will be a major catalyst of longer-term relative strength on the energy front.
The majority of you readers might have only limited exposure to true commodity exposure within your portfolio. A larger proportion of you will have some allocation to energy based equities, a group which has struggled from a relative perspective throughout 2025. However, recent action has been productive for broader representative XLE, seeing the fund post a pair of consecutive buy signals and re-enter a positive trend on its default chart. While it still sits aways away from being considered “strong,” the move higher is certainly notable. Pair this productive absolute movement with a strong relative showing for XLE against cash proxy MNYMKT on a 3.25% RS chart (below) and the near-term picture continues to improve. All this to say, while long-term strength is still absent for now, energy is showing the markings of a sector that is perking… but keep an eye on the group for follow through before adding exposure.
Other areas have also moved higher. While we don’t dive deeper into the continued strength for gold/precious metal groups in today’s report, the technical backdrop for the group as a whole remains quite strong. Additional global uncertainty is a possible tailwind for the space in the near-term for an already relatively strong asset class. In short, continue to monitor broader commodities. The top three asset classes sit within just a few signals of each other as of 6/13, and a meaningful uptick in long-term strength for energy focused areas could be enough to push Commodities higher. For now, we will wait and see. Remember, with global events come additional noise, headlines, and sometimes fear. At the end of the day, it is paramount that we continue to let price guide our hand as we wrap up Q2.
