Changes in asset prices are not random.
Let that sink in for a moment.
To someone new to markets, the constant ups and downs in stocks, bitcoin, commodities, and currencies can look like chaos.
Prices jump around all day, every day.
It’s easy to assume the movements are mostly chance, just noise bouncing around a chart.
But that’s not how markets work. We know this because we have the data.
Take crude oil last week as an example. The Crude Oil ETF (USO) surged roughly 33% in a single week, the largest weekly gain in its history.
If asset prices actually followed the neat “normal distribution” you learn about in statistics class — the same math casinos rely on — a move like that should occur once every four million years.
That’s not randomness.
That’s positioning getting squeezed.
That’s sentiment unwinding.
That’s a trend changing direction and forcing everyone who was leaning the wrong way to scramble.
Investors were positioned for the wrong outcome. The market corrected them.
That’s what markets do.
And they’ll keep doing it whether people understand it or not.
Personally, I love when this happens.
Because when sentiment, positioning, and price all collide at the same time, the opportunities can be enormous.
And crude oil just gave us one of the best recent examples.
When the Cover Rings the Bell
This is one of the reasons we pay attention to magazine covers.
We’ve talked about this many times before, and the examples keep showing up.
Remember this one from January?
That’s the President of the United States, Donald Trump, chugging a giant barrel of oil over his head with crude spilling everywhere.
The message was simple: The world was drowning in supply.
Oil everywhere. Too much of it. Prices going nowhere.
At least that was the narrative.
But positioning told a different story. At the time, asset managers were carrying one of the largest net-short positions in crude oil in history.
In other words, the professionals were heavily leaning the wrong way.
And once again, the journalists and the investors were on the same side of the trade.
That rarely ends well.
Since that cover was published, crude oil has rallied more than 50%:
As of Monday morning, prices are pushing even higher, briefly trading near $120 per barrel in overnight markets.
For perspective, oil started the year at just $57.
According to Charlie Bilello, last week’s move qualifies as a “6 sigma” event.
If asset prices behaved the way statistics textbooks assume, with neat and orderly distributions, a move like that should almost never happen.
In fact, it is roughly 750 times less likely than getting struck by lightning in a given year.
But markets don’t behave like textbook probability models.
Because asset prices trend.
They are not random.
So What Do We Do About It
We’ve been buying oil and gas stocks, and we’ve been pretty vocal about it.
The reasons are the same ones we’ve been talking about all along.
Sentiment was washed out. Positioning was leaning heavily the wrong way. And relative strength was already starting to show up across the space.
Those are the kinds of conditions that tend to lead to powerful moves.
And I don’t think this story is over. In fact, I’ve been leaning into it more aggressively.
In 2026, I’ve owned more midstream stocks than I have at any other time in my entire life.
Pipelines. Infrastructure. The toll roads of the energy business.
While everyone was focused on the narrative about oversupply, the market was quietly telling a different story.
The stocks were holding up. Many were already breaking out.
That’s usually your clue.
So we’ll likely continue adding to existing positions and putting on new ones this week.
You can see exactly which names are in my portfolio live and in real time through The Divergence and The Primary Trend.
This isn’t about what other people are doing. And it’s not about what I think other people should be doing.
These portfolios are built for me.
This is what I’m doing.
And right now, I’m betting this energy trend still has plenty of fuel left.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs