Surging Oil Prices Are Killing This Market - Market Outlook (Ep. 22)

The stock market experienced a volatile week ending March 13, 2026, marked by a third consecutive weekly decline, driven by geopolitical tensions in the Middle East, surging oil prices, and disappointing U.S. employment data.  The major indexes, including the Dow, S&P 500, and Nasdaq and the Russell, fell as investors feared rising inflation and slower economic growth.  The S&P 500 broke below key technical support levels, closing below 6,700 on Thursday, and the Nasdaq dipped below its 200-day moving average. The VIX opened the week trading at 35--just a monster increase in volatility. 

Transcript

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Welcome to this week's edition of Market Outlook. I'm your host, Derek Taylor, also known as DT. Market Outlook is a weekly podcast where I take a look at last week in the market, as well as previewing the week ahead. I will also share with you some potential options trades that I think are interesting for the week. But first, what were the major stories in the market last week? This past week, ending March 13th, 2026, the stock market experienced a very volatile week, marked by a third consecutive weekly decline driven by geopolitical tensions in the Middle East, surging oil prices, disappointing U.S. employment data. The major indexes that includes the Dow, the SP 500, the Nasdaq, and the Russell, they all fell as investors feared rising inflation and slower economic growth. The SP 500 broke below a key technical support level, closing below 6,700 on Thursday, and the Nasdaq dipped below its 200-day moving average. The VIX opened the week trading at 35, which is just a monster increase in volatility on the week. Escalating tensions in the Middle East, specifically military actions involving Iran, caused significant disruption to oil shipments, and that's driving oil prices to their highest levels. Since September of 2023, the surge with crude trading nearly $97 a barrel on the close of Friday increased worries about global inflation, gasoline prices. In the U.S., they've jumped for 11 straight days. And of course, all of this is going to affect the market. Rising fuel costs does affect so many industries within the market. And it's not just the U.S. market. We saw significant drops in European and Asian markets as these regions grapple with higher energy dependence and supply shocks. Despite the broader market sell-off, though, some tech stocks did show a bit of resilience. Oracle shares jumped following strong earnings and optimistic cloud computing demand, easing some concerns that investors had about some of these AI investments and the costs involved with them, all the uh high CapEx numbers that we're seeing. Semiconductor stocks showed a bit of resilience during some sessions this past week. Nvidia and AMD especially showed a little bit of strength despite the weakness in the overall market. So let's jump into the charts and see what the major indices did last week. Let's start with the SP 500, the SPX here. And if we take a look at the close of the previous Friday to the close of this past Friday, we saw a decline of around 108 points or so in the SP 500. That is a decline of 1.6% on the week, a really nasty week for the SPX. The NDX, which is the Nasdaq 100 index, it also saw a decline from the previous Friday to this last Friday. The NDX was down around 262 points. That is a decline of 1.1%. The NASDAQ actually was the strongest of the major market indexes. So the NASDAQ, despite being down a little more than 1%, actually did okay on the week when you compare it to what the SPX did. And especially if you compare it to what the Rut did. The Rut, of course, is the Russell 2000 index. And the Russell really has been the weakest index for a while now. The Rut actually finished the week down 45 points on the week. That is a 1.8% decline. And then finally, let's take a look at the Dow Jones index. I'm going to take a look at DJX here. Now the Dow Jones, of course, is only uh 30 stocks comprise it. So this is not an indice that I put a lot of weight on as far as yeah, it really doesn't tell the story of the broader market because it's only 30 stocks, not 2,000 like in the Russell, not 500 like in the SP, not even 100 like is in the Nasdaq, right? But the DJX was the weakest major indice, down 2%. But again, because it's only 30 stocks, all you all it takes is really one or two companies within that index to have a horrible week for it to really underperform. And then finally, let's move over to the volatility index. Of course, I'm talking about the VIX, which is the volatility of the S P 500. And this thing had a crazy week, right? We saw volatility increase of two Fridays ago, right? And that was the close of the previous Friday. And then we opened on Monday above 35 in the VIX. That is just an insane increase in volatility. Now, uh Trump came out and said, hey, the war in Iran is basically over. You know, we pretty much got things under control, and VIX started dropping like a rock Monday afternoon. And on Tuesday, things looked like they settled down. And then Wednesday, things looked like they were still settled down. And then people realized, hey, this war is not really over. And the problems with the Strait of Hormuz and uh oil supplies, oil shipments, uh, this could be uh more significant than what we initially thought. So now it looked like volatility wants to climb back up. And I think volatility is probably going to increase, especially early this next week, because this oil situation is not over until the oil tankers can freely navigate in the Strait of Hormuz. Uh, we're gonna have serious volatility pumped in this market. We're gonna have really high volatility, and I think overall the broader stock market is gonna be extremely weak because these oil costs, these rising oil prices are going to hurt most stocks in the stock market. You know, most industries rely heavily on fuel prices, right? And with rising fuel prices is going to come a lot of heartache and pain. So let's take a look at what some of the market sectors did last week. So, with the overall weakness in the market, pretty much most of your market sectors were down last week. There were two that finished positive on the week. One of them is pretty obvious. Uh, XLE, the energy sector, ETF here. Why was the energy sector positive on the week? Well, rising oil prices, especially. Well, that's good for oil-related companies that comprise this sector, right? So that is not like the obvious one that XLE had a positive week, but one that might have not been so obvious. XLU, the utility sector, actually finished positive on the week. It was up very slightly. XLU finished the week up about half a percent, where XLE, I didn't mention XLE finished the week up 2% on the week. Now let's talk about all the other sectors that did not finish positive on the week. Let's start with tech, because tech, we often talk about tech leads the market, leads the market up and down for the most part. But really, because of what's going on with oil right now, tech is kind of taking a backseat. And, you know, the the tech sector has been okay during all of this because it is not as concerned about what's going on with the rising oil prices and a lot of the big mega cap tech stocks. These are trillion-dollar companies that are a little bit harder to uh to shake, you know, than like your small cap stocks that are part of the Russell, for example, you know, and that's why the Russell is so weak. You know, a lot of the big mega cap tech stocks they can withstand, you know, a lot of pain. Right. So XLK, the tech sector ETF, was only down uh week over week, about 0.4% on the week. So a very small down week in tech. Let's talk about the ones that made the biggest moves down, though. Let's start with XHB, which is the home builders industry ETF here. Now, home builders, if you take a look at the chart for the last month or so in the home builders, this is one of the ugliest charts you'll ever see. From uh actually, if we go back to the beginning of February, uh this thing was trading around $121 a share, this particular uh home builders ETF now trading at just $100 a share. So that's that's a 20% decline in about a month and a half, and just a crazy move there in the home builders. We saw a significant gap down the previous Friday, two Fridays ago. And then from the previous Friday's close to the last Friday's close, we can see that home builders finished the week down almost 5% on the week. Really, really ugly week. Uh moving on to retail. Retail was a big loser this week, and you kind of expect that retail uh is going to be affected by uh uh rising fuel prices and shipments, you know, shipping products, and then some of the inflation concerns with tariffs and stuff. All of that is still out there. The retail sector finished the week down around 3.7% on the week. Let's take a look at XLF, which is the financial sector ETF. And the financials were down a little more than 3%. XLF looks like it finished the week down around uh 168 per share. That is a decline of 3.3%. XLI, which is the industrial sector, also finished down a little more than 3% on the week. XLY, which is consumer discretionary. Now, consumer discretionary, when the market is doing bad, consumer discretionary tends to really underperform. And that's the case here. Consumer discretionary was down 3.1%. If we take a look at the close of the previous Friday to the close of this past Friday, XLC, which is the communications sector, uh, this would include some of the big megacap tech stocks. Uh companies like Meta, for example, and Google are actually part of this particular sector. This finished the week down 2.6%. Moving over to biotech, we'll take a look at XBI. This particular sector was down 1.7% on the week. Healthcare finished the week down around 1.9% on the week. And then XLRE, which is the real estate sector ETF. This finished the week down 1.5%. XLB, which is the materials sector, this finished the week down 1.3% on the week. And then finally, consumer staples, which is XLP. This finished the week down 1.2% on the week. So just ugly, really across the board, across all sectors, across all industries, outside of energy and uh utilities, right? They were the only ones that did okay. And I would also throw in tech, the tech sector being down only 0.4% on the week. You know, the tech sector was really strong and resilient this week. Let's take a look at some of the individual megacap tech names. Let's start with the ones that actually performed okay this week. Let's move over to AMD here. Now, AMD, if we take a look at the close of the previous Friday to the close of this past Friday, you can actually see it's actually a small little up move. Now, we actually AMD actually had some really good candles here as far as green candles. Like it had three updates Monday, Tuesday, Wednesday, and then it sold off Thursday and Friday, but the sell-off Thursday and Friday was not enough to erase what was a small little up week in AMD, a move up of about half a percent. And NVIDIA, um, sticking with the semiconductors, also had an okay week. NVIDIA finished the week up about 1.4% if we take a look at the close of the previous Friday to the close of this past Friday. And I'm NVIDIA showing some real strength there. Google up about 1.3% on the week, and that's pretty much it for the big megacap tech stocks, right? AMD, NVIDIA, Google, they had okay weeks, and then everything else is pretty nasty. Let's start with some of the big movers to the downside. Apple, Apple finished the week down around 2.9%. Amazon finished the week down uh around uh $5.50 on the week. That is a 2.6% move in Amazon. AVGO Broadcom. We mentioned that the semiconductors, uh, you know, AMD and NVIDIA did okay this past week. You would think Broadcom would have been part of that group as well, but it was not. Broadcom actually finished the week down uh well a pretty significant amount. 2.5% on the week. That's about an $8.32 move. Coinbase, which of course is very heavily tied to crypto markets. Coinbase was a little weak uh this past week. It finished the week down just under 1% on the week, kind of a nothing week for Coinbase. It's a very volatile stock anyway, of being crypto related. Crypto, of course, is very volatile. Moving over to Meta, Meta, of course, has had some serious weakness uh in the in the last uh couple of weeks. Meta finished the week down this past week, almost 5%. Wow. Meta dropped uh $31 and change from the close of the previous Friday to the close of this past Friday. That is a move down of about 4.8%. Rounding out some of the other big megacap tech names, Microsoft finished the week down around 3.3%. Netflix, which you know has shown some serious weakness for a while, but once the merger thing, once that came off the books, right, all of a sudden we got a big pop in Netflix, and then it just kind of found a range that it's been trading in. But this past week, at least from the close of the previous Friday to the close of this past Friday, Netflix was down $3.71. That is a 3.7% decline in Netflix. And if we move over to Palantir, Palantir also very weak. Uh if we take a look at the close of the previous Friday to the close of this past Friday, Palantir was down about $6.21. That is a 4% decline. And finally, Tesla. Tesla finished the week down 1.4%. That's only a $5.53 down week in Tesla. Tesla nearly a $400 stock. So, you know, a $5 move down in the week. I would say Tesla probably outperformed a little bit this week, uh, considering the weakness in the overall market. A couple of other companies I do want to highlight, since this week is all about oil. Let's actually take a look at XOM, which is ExxonMobil. Uh, obviously, you would expect this thing to have had a good run here in recent weeks, and it has, right? ExxonMobil trading at $156 a share. That is very close to an all-time high it made about two weeks ago, really when the whole Iran conflict kind of started. Uh, ExxonMobil uh definitely doing well these days. CVX, which is Chevron, is pretty much at an all-time high, trading at $196.82. If you look at the chart, uh, I've got these EM8 ribbons on the chart, and this thing is clearly in a bullish signal. It has been just straight up and to the right, really since the beginning of the year. And of course, all of that leads us into some of the futures and commodities. So let's start with the obvious one. The most important one this week, obviously, is oil. Let's take a look at the USO chart. USO is the oil ETF, it basically mirrors your crude oil futures. USO finished the week up about 10% on the week. Just a crazy, crazy move. If I take a look at the CL futures, so let's actually take a look at the CLK contract here. Uh this has just been a crazy, crazy. You can see this is the range that crude oil typically trades in, right? And then all of a sudden, the last two weeks, you've got this on a chart, right? This is for those watching the video portion of the podcast, the last two weeks have just been insane. If you've been in any kind of trade in CL or the micro crude MCL, I've got strangles on in MCL, and they're getting killed. They're getting absolutely crushed because of uh strangle is short puts and short calls. The short calls obviously are getting killed because of the huge up move, right? They've been blowed out, right? But here's the thing, I'm not profiting on the short puts either, even though I got the move right on the puts side. And the reason I'm not profiting on the puts is because volatility is expanding. Remember, options pricing is all about direction, time, and volatility. And in this case, when you're short options, volatility spiking hard, that hurts you. And the volatility is through the roof right now in crude oil. Moving over to natural gas, UNG, we'll take a look at the ETF here. This finished the week down about 0.9% on the week. So netty gas really not spiking the way crude oil is. Uh moving over to the precious metals, gold. Let's take a look at GLD here, which mirrors gold futures. This finished the week down uh about $12.67 on the week. That is a decline of 2.7% on the week. Silver, which is SLV, is the ETF. This kind of tracks your silver futures prices. This finished the week down $3.25. That's a pretty significant down move. That is a decline of 4.3% on the week. Let's move over to crypto. Let's take a look at ETHA, which is the Ethereum ETF. This finished the week up 6.4%. You can see Ethereum kind of found a floor here uh about a month and a half ago, and it's kind of been trading in a range. But this range is kind of deceiving. If you zoom in a little bit, it's actually starting to make higher lows, right? Yes, higher lows and higher highs. It's kind of moving up. It's a very gentle up move though, but I do think Ethereum and uh Bitcoin have both kind of found a floor and they're gonna start heading back up now. Uh iBit, the uh Bitcoin ETF here. You can see the chart looks very similar. We actually had a positive week for Bitcoin up 4.6% on the week. Moving over to currencies, let's start with the dollar index. I'm gonna take a look at UUP, which is the dollar index ETF. Uh the dollar was very strong this past week, up 1.5% on the week. And if the dollar is strong, you're probably gonna see some weakness in the euro, the British pound, and the Japanese yen, which are the three major components of that dollar index. So if we take a look at FXE here, this is the Euro ETF, and you can see from the close of the previous Friday to the close of this past Friday, FXE finished the week down 1.6%. If I move over to FXB to take a look at the British pound, and this finished the week down 1.2% on the week. And then finally, FXY is the ETF for the Japanese yen here. And this finished the week down 1.1% on the week. And then rounding out some of the futures and commodities, let's talk about bonds. So I'm gonna take a look at ZB, the proper futures here rather than TLT. Uh, you can see ZB uh made a high about two weeks ago, and it has just done nothing but go down ever since. Just red candle, red candle, red uh out of 10 candles here, nine are red. You got one green candle, which had a huge range that day, a lot of two-sided action that day. But it's essentially, we'll just say it's 10 straight red candles in a row. Clearly, the bonds are very weak. Uh, I'm not gonna say they're in crash mode, but the bonds really could use uh a nice up day or two, right? Uh, I don't know if we'll get that this week because I think we're we're in more trouble. You know, as long as this war in Iran and especially as long as oil prices, you know, oil prices keep surging, it's going to cripple all these other markets. So let's talk about earnings for this week. There are not a lot of interesting companies worth talking about as far as earnings this week. Uh, Monday before the bill, Dollar Tree, which is ticker DLTR reports. Now, you can't trade this unless you already had a trade on because it reports before the bill on Monday. Dollar Tree, though, is marginally tradable as far as options. Monday after the bill, no real companies to talk about. Tuesday before the bill, really nothing to talk about. I guess we could talk about ASO, which is Academy Sports. That does report before the bill on Tuesday, but it's not really all that tradable as far as options trading. Tuesday after the bell, you have Ocklo. Lululemon and DocuSign, all mediocre. You know, Ocklo, the option markets in it are pretty good because it was a bit of a hot kind of meme stock a couple of months back. So it's tradable. Lululemon and DocuSign are mediocre. Wednesday before the bell, you have GIS, that's General Mills, M, which is Macy's, and WSM, which is Williams Sonoma. Wednesday after the bell, probably the most important earnings event this week, MU, which is Micron, because of what's going on with memory prices and just the memory stocks are all just exploding higher. It will be very interesting to see what goes on with MU after the bell on Wednesday. You also have after the bill on Wednesday five below, that's your five below discount stores. That's ticker symbol F I V E. Thursday before the bill, you have Baba reporting and ACN, that's Accenture. Thursday after the bill, you have FDX, which is FedEx, PL, which is Planet Labs, and Fly, which is Firefly. Friday before the bill, you have XPEV. That's XPing, that is your Chinese uh electric vehicle manufacturer. I don't know if I've ever traded that thing. Matter of fact, most of these tickers I just called out for the week. I've never traded. I've traded Ocklo and MU and BABA a time or two. Most of the rest of these, I think, are probably best left alone. Now let's talk about some trade ideas for the week. I've got to be honest, because the market is so weak, and I don't think, at least early in the week, I think we're in for some more pain because this war and what's going on with oil shipments, that's not going. To straighten itself out at least for a few more days, right? At best case scenario, at least for a few more days, possibly multiple weeks. I hope not because my oil strangle is causing me a lot of pain. But I think we're in for some more pain. I've just got to be honest. You know, that's my gut feel. So for me, what I would do, I've got to be bearish in the overall market for the week. So to play for a bearish market, what I like to do is I like to put on a weekly trade. I'm going to go to XSP, which is the mini SPX. You certainly could use the proper SPX if you've got a bigger account, but I'm going to use XSP. I think this is appropriate for most people's account sizes. And I'm going to go into the six-day cycle. And I've already got a trade on, but you can see what I've done here is I've put on a long put butterfly. And what you want to do is you want to put this on about at the expected move to the downside for the week. So I would go around the 25 delta here and I would sell that. And then what I like doing is I like going about $7 wide on each side. So let me go up $7 and buy a put, and then down $7, buy a put, and then double up the shorts in the middle, and that creates our butterfly spread, right? If the market drops into the spread, we have the potential here to make $650 because I'm paying a 50 cent debit for this butterfly. Very cheap. One contract of this butterfly, only 50 cents, $50 for the max profit potential of $650. And because this is an index product, there's no assignment. Everything settles to cash. And the great thing about butterflies is in order to potentially make that max profit, you actually have to wait till expiration and you have to pin the short strikes exactly at expiration. Typically, you can't do this with stocks and ETFs because there's assignment risk. You don't want to be assigned shares of stock, which you will be assigned if you're inside the spread because there are going to be some options that are in the money, some out of the money. You could end up with a long or short share position that you don't really want. You don't have to worry about that on these index products. So put on this long put butterfly and you can size it however you want. You could buy multiple contracts at 50 cents a piece, you know, buy three of them. Spend 150 bucks for the max profit potential of 1950. And if we have a really ugly week, you know, you're going to finish somewhere inside the spread. You're probably not going to pin the short strikes and make the max profit 1950 at expiration, but you certainly could finish within a couple of bucks on either side of the spread. And you're probably going to make, in this case with the three contracts, $1,200, $1,400, $1,600, somewhere in that range. And that is a nice chunk of change that will it's not going to make you whole as far as your other long market positions that are probably going to suffer in the move down, but it certainly helps offset some of your other losing positions. Another trade I think is interesting for this week, because oil volatility is just absolutely insane, is I would go into either CL or MCL, depending on your account size. I'm going to choose MCL in this case. Again, something appropriate for most everybody's account size. And I would go about, let's go 60 days out. And what I would do is I'm going to go way up here to all of these very high strike calls, right? And these really far out of the money. You think they're far out of the money, but the deltas on them are not so uh low here. But what I would do is I would do a really wide call ratio spread. So I would buy, let's buy the 155 and then sell the 175. That's a $20 widespread, right? Pretty decent spread. And then double up the 175 shorts here. And you end up with an overall credit of 109 in this example. 109, that means if we never trade above 155, you know, I'm gonna get 109 max profit. That's a very likely event. That's a very high probability event that we're never going to go above 155. But if we do go above 155, well, that's inside this $20 wide call debit spread that's embedded in the call ratio spread, which adds another $2,000 of potential profit. You know, $2,100 in this case, $2109 is the max profit, right? The $20 spread plus the $109 credit, right? That's $2,109 as the max profit if we get to $175 and 10 it at expiration. So even if oil continues to explode higher on this example call ratio spread, are you really going to be mad? You know, this is very different than a lot of, you know, like short call kind of plays that are getting killed on the up move. With this out-of-the-money call ratio spread, you actually don't mind oil exploding a little bit. You know, initially it's going to cause you some pain because of the volatility is going to cause this thing to show a negative PL. But if you hold this for the next 61 days and for some reason oil is still hanging out up here, right? No, well, I say still hanging out, it's never been above what, 120. But if we got a crazy move, especially late in this option cycle, you actually stand the chance of making a very significant profit. But if it never makes that move, when I'd say there's a at least a 95% chance it never even comes close to 155. That well, okay, no harm, no foul. You get 109 credit, you make a buck, and you move on. And in this particular trade, because we're using the futures, the buying power relief is substantial. This two by one call ratio sprit is only using $458 of buying power using the MCL futures. So as far as risk reward, not a lot of risk as far as buying power that you have to put up up front versus the credit you receive. For me, all signs point to go is reporting that this trade has a pop, a probability of profit of 98%. And I would say, yeah, that's probably what I would expect on uh that trade because of the really high strikes. One other trade that I think might be interesting this week, uh Bitcoin. I I keep saying Bitcoin and Ethereum look like they found a floor and they look like to me they want to go up. I like the idea of going to the 60-day cycle, you know, the closest to the 60-day cycle typically is where I go and sell puts. And I'm gonna go sell this 18 delta put here. And this gives me a credit of 105 on a buying power reduction of $886. You know, it's not the best as far as risk reward, but it's not terrible either. If you wanted to add a little bit more credit to the trade, you certainly could sell both sides of the trade. You can go sell a similar delta call, maybe the 16 delta call, which brings your total credit to 172 on a buying power reduction of 886. If you want to be uh Delta neutral, for me, because I'm bullish, I'd probably just sell the uh put, right? I don't need the call. I'll sell the put. And if for whatever reason Bitcoin continues to go lower, it kind of reverses course and decides to start ticking back down again. Do I mind taking 100 shares of iBit at $33 a share? Well, really $32 a share because I got a dollar credit. Do I mind taking 100 shares of iBit at $32 a share? Uh, me personally, no, I think that's a great uh risk reward on that because I don't mind taking those shares and potentially running the wheel. I just start running the wheel after that and start selling covered calls against my new share position. So there you have it. That is this week's edition of Market Outlook. For those of you that are listening to the audio version on Spotify or on Apple, please give the show a five-star rating. Help us grow in the algorithms. For those of you watching the video portion of the podcast on YouTube, I have written a book. This book here, The Super Wheel Option Strategy. It's about my favorite option strategy, which is the wheel strategy. This book is published on Amazon. You'll find a link to the book in the show description on YouTube. All right, guys. Peace.