Why We’re Unfazed by Energy Stock Chaos

By Michael Salvatore, Editor, TradeSmith Daily

In This Digest:

How to stay calm in this chaotic market
Beware these AI disruption casualties
Private credit troubles claim another victim

One deleted tweet just swung oil prices by $30…

On Tuesday, Energy Secretary Chris Wright posted to social media that the U.S. Navy had successfully escorted an oil tanker through the Strait of Hormuz.

Then he deleted it. The White House said no such operation had taken place, but the price still soared from a low of about $82 to a high of $113 during the day.

In the roughly five hours that followed, Brent crude, the international benchmark, fell as much as 12%. Then it climbed back to 13% a barrel as uncertainty flooded back in.

And this comes just days after the world’s most important energy fuel jumped 24% and then crashed 27% between Friday and Monday.

Welcome to the highly reactive, volatile, blink-and-you’ll-miss-it oil market of March 2026.

This comes amid more market-moving headlines…

Reports emerged yesterday that the Iranian Revolutionary Guard Corps had begun laying explosive mines in the strait, where roughly one-fifth of the world’s oil passes through. If that’s true, it makes any further oil transport through the Persian Gulf all the more fraught.

Soon after came word that the International Energy Agency would release 400 million barrels of oil from its emergency stockpile. That’s the largest-ever release – more than double the 182 million barrels it unloaded after Russia’s February 2022 invasion of Ukraine.

If you’re holding energy stocks, this week has been a stomach-churning test of conviction.

And the deluge of market-moving headlines is unlikely to end anytime soon.

But here at TradeSmith, we aren’t sweating it. Our tools don’t follow the headlines – they follow the price action.

And the price action now, just as it has for months, is telling us to stay bullish on oil.

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This energy fund is up 25% since our system flagged it…

TradeSmith’s Short-Term Health indicator tracks a stock’s recent volatility – its up and down price moves – and sounds the alarm when it starts moving in ways that are out of character.

That kind of unusual activity is often the first sign that a stock’s trend is about to change.

Reading it is simple: Green means buy. Yellow means hold. Red means sell.

And the S&P 500 Energy ETF (XLE) – which holds the biggest U.S. oil and gas companies – has been in a Short-Term Health Green Zone since Nov. 12.

Since that signal fired, XLE is up more than 25% – through tariff fears, AI disruption anxiety, and now the most volatile oil market since the pandemic.

Tuesday’s 12% one-day crude plunge – the steepest in four years – didn’t flip the signal. It didn’t even come close.

That’s by design. Short-Term Health knows how volatile a stock or ETF normally is – so it doesn’t overreact to a rough day. It only fires when something is truly out of the ordinary.

A commodity as volatile as oil swinging 12% in a day may look dramatic to you or me. But to our system, it’s the kind of behavior we expect for an oil-and-gas stock ETF during a geopolitical supply shock.

Our system also flagged big moves in individual energy stocks…

SM Energy (SM) – a small-cap U.S. oil and gas exploration and production company – entered a Green Zone two days before the U.S. and Israel began their attack on Iran. Since then, it’s up nearly 18%.
Antero Resources (AR) – one of America’s largest natural gas producers – is up about 11% since it entered a Green Zone on Feb. 17.
And EQT (EQT) – America’s largest natural gas producer – is up about 7% since it entered a Green Zone on the same day.

It shows that when you follow data instead of the headlines, you can make outsized gains… even amid seemingly chaotic market moves.

You wait for the green light, step on the gas, and don’t look back until you see yellow.

Those three energy stocks are still a buy according to our system.

But Keith Kaplan – TradeSmith’s CEO and the man who used our tools to sell almost all his stocks a week before the COVID crash – is watching something bigger build in the background.

We’re seeing Short-Term Health buy signals in pockets of the market. But sell signals are popping up with alarming frequency – especially in the popular tech stocks that powered the market higher for the past three years.

In what we’ve been warning could be the Year of the Bear, you want these tools on your side. Go right here to learn more about them, directly from our CEO.

Whether you decide to join us or not, at least listen to Keith’s warning about the volatility we saw coming this year. Then, decide if you’re prepared to go it alone if things get worse.

Predictive Alpha says sell these AI disruption casualties…

ChatGPT, Gemini, and Claude are called large language models because they’re trained on massive datasets of words.

Think of Predictive Alpha as a large numbers model. Instead of words, it’s trained on sequences of stock market moves – including irregularities, jumps, and volatility spikes.

It looks at this historical data to forecast when patterns are likely to happen again. And it keeps updating its forecasts as fresh data comes in.

Over more than 700,000 projections a month since we introduced the model in 2023, we’ve seen some stocks hit their forecasts more than 90% of the time. And we most often see 70% historical accuracy or higher.

We keep track of its top 10 bullish and bearish forecasts to see what they tell us about broader investment themes.

Below you can see the 10 most bearish Predictive Alpha forecasts ranked by historical target accuracy:

At the top of the list – with an 89.8% historical target accuracy on its bearish forecast – is ASGN (ASGN). It’s an IT staffing and consulting firm. It places technology professionals on contract at companies across the private sector and government.

No big surprise there.

As AI handles more coding, data analysis, and technical project management, demand for contracted human IT labor shrinks.

Predictive Alpha sees it falling 0.9% to $42.49 by March 23. A small change, but one with a high degree of confidence – forecasts on ASGN have been accurate nearly nine in 10 times in the past.

Cloud-based network security provider Zscaler (ZS) sits further down the list.

In theory, rising AI threats should increase demand for what Zscaler does. But since Anthropic dropped its new Claude security tool in February, it’s triggered a wave of AI disruption panic across the entire cybersecurity sector. CrowdStrike (CRWD) and Zscaler (ZS) each dropped about 10% in a single session. Zscaler is now down roughly 28% from its highs.

Predictive Alpha forecasts the stock will fall 3.4% by March 24, with a 75% historical accuracy on this forecast.

These are not the only AI disruption casualties on the bear list…

Workday (WDAY) sells human resource and financial software to large companies – think payroll, performance reviews, and financial planning tools.

Workiva (WK) sells financial reporting and compliance software. Both are in the business of automating the kinds of workflows AI is increasingly able to handle on its own.

But the most intriguing name on the list is StepStone Group (STEP). It’s forecast to fall 5% by March 20, with an 86.7% historical target accuracy.

StepStone is a financial adviser to some of the world’s largest institutions – pension funds, university endowments, and sovereign wealth funds. It helps them invest in private equity and private credit and keep watch over how those investments perform.

When confidence in private credit wobbles – as it has lately, with BlackRock, Blackstone, and Blue Owl all telling investors they can’t have their money back – institutions tend to avoid these kinds of investments.

And when less money flows into private credit, there’s less for StepStone to advise on.

Steer clear.

To building wealth beyond measure,

Michael Salvatore signature