Three Trades to Make at the Dawn of a New War

By Michael Salvatore, Editor, TradeSmith Daily

In This Digest:

Commodities are on the move after the strikes on Iran
What our AI-powered trading model sees coming in energy, gold, and defense
Top small- and mid-cap oil stocks to buy now

Investors woke up to a different world this morning...

Over the weekend, the U.S. and Israel launched attacks against Iran, targeting leadership compounds, military installations, and nuclear infrastructure.

On Saturday, airstrikes on a Tehran compound killed Iran’s Supreme Leader Ayatollah Ali Khamenei, the commander of the Revolutionary Guard, and the country’s defense minister.

Iran retaliated, firing missiles at Israel, U.S. bases across the Gulf, and civilian targets in Dubai and Kuwait.

There are also reports this morning that Iranian drones have targeted one of the Middle East’s largest oil refineries, the Ras Tanura refinery in Saudi Arabia.

As a result, major shipping companies – including MSC, Hapag-Lloyd, and Maersk – have suspended operations through the Strait of Hormuz, a narrow waterway that cuts along Iran's southern coastline.

About one-fifth of the world’s oil supply – and closer to one-third of all seaborne crude exports – pass through the strait, making it a critical chokepoint for global energy markets.

Oil prices are moving higher on supply disruption fears. The price of Brent crude oil, the international benchmark, has crossed $79 a barrel, up from $70 a barrel at this time last week.

Some economists are now predicting a move to $100 oil as a result of the strikes on Iran.

Gold – already up more than 20% year-to-date on tariff and inflation concerns – now has a new tailwind.

Most folks think of gold as a hedge against inflation, but it’s better understood as a hedge against chaos. And gold shot up as much as 2.5% in early Monday trading, approaching its all-time closing high above $5,400 an ounce.

Defense and aerospace stocks – already among the strongest performers of 2026 – have a clearer fundamental case than ever.

We won’t speculate on what comes next on the geopolitical front. Our beat here at TradeSmith Daily is to follow the data, not the headlines.

And while no one predicted exactly what happened this weekend, one of TradeSmith's most advanced software tools was picking up bullish signals in energy, gold, and defense before the strikes began.

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I’m talking about our Predictive Alpha AI forecasting engine…

You're probably familiar with ChatGPT, Gemini, and Claude. They're called large language models because they're trained on massive datasets of words.

Think of our AI-powered trading system as a "large numbers model."

We trained it on more than 100 billion stock market data points – including odd jumps and volatility spikes. It learns patterns that are hidden in the noise, then projects where stocks are likely to move up to 21 trading days out.

Some stocks hit their price projection more than 90% of the time. That covers more than 700,000 projections a month since we introduced the model in 2023. And we consistently see 70% accuracy or higher.

And Predictive Alpha has bullish forecasts on the three areas the Iran news has put in focus.

For instance, it’s forecasting that the SPDR Energy Select Sector ETF (XLE) will rise 5.9% by March 30. Forecasts like this one have been accurate 72.6% of the time historically.

This signal was in place before the strikes on Iran. But they add a powerful new tailwind for higher energy prices.

On defense, Predictive Alpha forecasts that Northrop Grumman (NOC) will rise 6% by March 30. Historical accuracy on this forecast is 68.8%.

Northrop makes advanced weapons systems, stealth aircraft, and missile defense technology. So it’s the kind of company investors flock to when geopolitical risk rises.

On gold, Predictive Alpha forecasts that the VanEck Gold Miners ETF (GDX) will rise 6.3% by March 17, with a historical accuracy of 86.7% to hit this target.

And as we showed you last week, our AI algorithm has been bullish on gold well ahead of the weekend’s events.

Energy stocks have also been flashing green for months…

That’s going by our Short-Term Health indicator. It shows you when stocks are in healthy uptrends, unhealthy downtrends, or transitions between the two.

It’s more sensitive to near-term trend shifts than our classic Long-Term Health indicator. But it works on the same traffic-light system:

Green: The stock is in a healthy short-term uptrend and is a buy.
Yellow: The stock has pulled back more than halfway to its stop loss – a caution sign.
Red: The sell signal has triggered, and we’re waiting for a new buy signal.

As our CEO, Keith Kaplan, got into in Friday’s Daily, the Energy sector is one of the healthiest of all the S&P sectors.

That’s because it has one of the highest numbers of stocks in the Short-Term Health Green Zone – more than 95% of the Energy stocks we track.

And when searching through the energy stocks in the major large-, mid-, and small-cap indexes, we see that all but one of these Green stocks has had that signal for longer than a week. Here are the five most recent signals in our system:

As you can see, new Short-Term Health Green signals fired on Antero Resources (AR), EQT (EQT), Par Pacific Holdings (PARR), Murphy Oil (MUR), and SM Energy (SM) in the past two weeks. Every one of these companies is in the business of oil-and-gas exploration and production.

Until this past weekend, this energy dominance story has been mostly due to the AI infrastructure buildout we’ve been covering in these pages.

AI data centers consume energy on a level that’s already straining the grid. They consumed more than 4% of all U.S. electricity in 2024, with consumption set to more than double by 2030. One single AI-focused facility consumes as much power in a year as 100,000 U.S. households.

That’s a huge amount of demand that, now because of the war with Iran, is running headlong into a supply shock.

Iran itself is the world’s sixth-largest oil producer. In 2024, it extracted more than 4.5 million barrels per day. With an ongoing war, Iran’s production and exports have effectively gone offline.

But an even bigger story is the broader surrounding region.

Conflict in the Middle East doesn’t just mean disruption for Iran. It means disruption for Saudi Arabia, the world’s second-largest oil producer at nearly 11 million barrels per day. And for the UAE, which produces 4.5 million barrels daily. And Iraq, and Kuwait, and Qatar, and so on…

All of this leads to tighter oil and natural gas supply – like we saw in 2022 when Russia invaded Ukraine. That boosts the underlying price of the commodity, which leads to higher revenues for energy producers. And you’ll recall that Energy stocks were the big winner in 2022, amid a bear market that took almost everything else lower.

There’s no telling how the conflict in Iran will play out – or how long it will last.

But as we’ve shown today, you don’t need to know the future when you’re following TradeSmith’s tools. Our indicators have been bullish on energy for months and will stay bullish as long as this strong uptrend is intact.

So while the better time to buy energy stocks was last week, it’s hardly a bad time right now.

With commodities on the move, it pays to listen to Rick Rule…

Rick got his start in the natural resource investing business in 1974 and has been involved in it ever since.

In 1990, he founded the business now known as Sprott US Holdings, which merged into Sprott Inc. – a global asset manager focused on precious metals and critical materials investments – in 2011.

But he’s best known for his windfall investments in the natural resource sector.

For instance, in the early 2000s, Rick attended a mining conference in Kalgoorlie, Western Australia, where he met John Borshoff, who had a small uranium company called Paladin Energy.

Borshoff had negotiated an unusual severance from his previous employer – a worldwide uranium exploration database built by West Germans in the 1970s at a cost of billions of dollars. He didn’t need to find uranium – he just needed to stake claims on deposits already mapped.

Rick bought in at 10 cents a share, uranium ran from $8 a pound to $145 a pound, and Paladin went on a 1,000-fold run.

But perhaps his most famous win was being invited to invest on day one in Franco-Nevada (FNV) – the gold royalty company that turned a $2 million seed stake into more than $2.5 billion. That’s a 124,000% return, built not by digging gold out of the ground, but by owning the rights to other people’s mines.

Now, Rick is focused on a small group of resource companies he believes are next in line for that kind of attention – from Washington, from Wall Street, and from the tech giants scrambling to lock up supply chains.

His thesis connects directly to the AI infrastructure story, the defense buildout, and the energy demand surge our own tools are already surfacing.

Catch Rule's full thesis – and a free recommendation to take advantage – right here.

To building wealth beyond measure,

Michael Salvatore signature