Why the IEA Oil Release Is a Band-Aid on a Bullet Wound VIEW IN BROWSER By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - The biggest strategic reserve release ever — and oil still went up
- Investors are fleeing tech for this defensive sector
- Here's where the Big Money is flowing now
The biggest-ever oil release was a flop… Yesterday, the International Energy Agency announced the largest release of emergency oil reserves in history: 400 million barrels. That’s about one-third of the strategic reserves of its 32 member countries. Why? Because Iran has shut down traffic through the Strait of Hormuz, the narrow waterway off Iran’s southern coast. About one-fifth of the world’s oil exports passes through this channel. And just yesterday, Iran's navy struck three cargo vessels in and around the Strait. One of them — a Thai ship called the Mayuree Naree — caught fire inside the waterway and had to be abandoned. Four hundred million barrels sure sounds like a lot. It’s more than double the previous record release, which came after Russia invaded Ukraine in 2022. But it covers only about 20 days of normal traffic through the Strait… and only four days of global demand. This fact wasn’t lost on investors. The news of the strategic reserve release didn’t put a dent in oil prices. Yesterday, Brent crude oil, the global benchmark, rose 5% to almost $92 a barrel. By noon on Thursday, it surged to $100 a barrel. That’s not a big surprise. The emergency oil release addresses short-term supply. But it does nothing to address the threat to longer-term supply as the war grinds on. To say our Age of Chaos thesis is playing out is an understatement. As longtime readers may recall, we’ve been predicting that the 2020s will be one of the most chaotic, turbulent, and volatile decades in living memory. And the war with Iran is just the latest chapter in that story. But that’s not a reason to panic. By following the data, we can play what may be the defining trend shift of the year.
Money is leaving tech stocks and pouring into this defensive sector… One of the most useful things you can do with our Short-Term Health indicator is zoom out to the sector level. Instead of looking at individual stocks, you can track what percentage of each sector is trading in a healthy uptrend — and how that’s changed over time. As a reminder, Short-Term Health watches how a stock or ETF normally moves — and flags when that pattern starts to change. Green means buy. Yellow means caution. Red means sell. When you run this analysis across the major S&P 500 sectors from the start of the year to today, only five have seen increases in Green Zone stocks: Utilities, Real Estate, Energy, Materials, and Consumer Staples. Every other sector has seen its Green Zone count shrink and its Red Zone expand. The two most dramatic changes tell the story of 2026 in one picture. 
Utilities have gone from a laggard to one of the strongest sectors in the market. At the start of the year, more than 61% of stocks in the sector were in the Red Zone. Today, that number stands at about 3%. That’s a defensive rotation signal — investors are moving into stocks that pay steady dividends and don’t depend on economic growth to hold their value. When uncertainty rises, money flows toward companies that will be in business even if the tech bubble busts or the economy heads south. No matter how bad it gets, consumers aren’t likely to forego keeping the lights on. And there’s another key reason investors are piling into Utilities stocks. AI data centers consume extraordinary amounts of power — a single large facility uses as much electricity in a year as 100,000 American households. The war with Iran has made oil and gas supply chains look fragile. Regulated utilities that use predominantly coal and natural gas (two commodities that the U.S. is a net exporter of), renewables, or even nuclear power are insulated from the oil blockade. Now, look at the opposite setup in Technology… Technology led the market higher for three straight years. But in 2026, it’s seen one of the sharpest rises in unhealthy Red Zone stocks of any group we track. 
At the start of the year, just 35% of Technology stocks were in Red Zones. Today, 56% of them are. Part of the reason is that AI disruption fears have gutted software stocks. Tech sector ETFs like the Technology Select Sector SPDR Fund (XLK), along with the tech-filled Nasdaq 100 index, are loaded with software companies that AI threatens to disrupt. And last week, the Nasdaq 100 entered a Short-Term Health Red Zone — its first Flash Stop signal since before last year’s Liberation Day crash. Put these two charts together, and you get a clear picture of where money is moving in 2026: out of growth and into stability. And our Quantum Score shows you the best stocks to be in. This is where the Big Money is flowing… Identifying which sectors are winning is the first step. Finding the best stocks within them is the second. That’s the purpose of our Quantum Score. It combines two factors into a 0–100 rating system: - A Fundamental Score – earnings, revenue, and profit margin growth.
- A Technical Score – price momentum and unusually large buying volume from institutional investors (aka Big Money).
Anything above 80 is a buy. Below that, look elsewhere. Let’s run the Quantum Score screen on five sectors with improving Short-Term Health—Energy, Utilities, Real Estate, Consumer Defensive, and Materials. We’ll look across the S&P 500, Dow, Nasdaq, S&P 400 mid-cap index, and S&P 600 small-cap index. And when we sort by Technical Score to surface the stocks with the strongest price momentum, another clear picture emerges. 
First, all but three of these stocks are mid-cap companies with market values of between $2 billion and $10 billion. That’s telling us that the biggest moves are headed toward smaller companies and away from the mega-caps that have dominated for three years. At the top of the list is oil-and-gas services company Tidewater (TDW). With a Quantum Score of 95.9 and a Technical Score of 100, it’s been in a Short-Term Health Green Zone for more than a month. Tidewater operates the boats that service offshore oil and gas platforms. And when land-based supply chains get disrupted, offshore production becomes more valuable. So do the companies that keep those rigs running. Royal Gold (RGLD) sits right behind it with a 95.1 Quantum Score and a 96.7 Technical Score. It’s a gold royalty company that owns the rights to a percentage of production at mining operations without bearing the cost of running them.
Gold has already risen nearly 20% this year. And with gold being a traditional “chaos hedge,” the Iran war is an additional tailwind. Royalty companies amplify gold’s moves because their costs stay fixed, while their revenues rise along with the gold price. Aluminum maker Alcoa (AA) has a Technical Score of 100 and a Quantum Score of 93.8. Aluminum is an AI infrastructure material — it’s used heavily in data center construction. It’s also a beneficiary of the move by investors into the Materials sector. Two other stocks are worth noting: - National Fuel Gas (NFG), a regulated natural gas utility with a 93.8 Quantum Score and a Technical Score of 100, and
- Diamondback Energy (FANG), one of the most efficient oil-and-gas explorers in the Permian Basin with a 93.2 Quantum Score.
The Big Money found these stocks before the headlines caught up. That’s what the Quantum Score is designed to show you. Keep them on your watchlist as the Iran war continues to dominate the headlines. To building wealth beyond measure, 
Michael Salvatore
Editor, TradeSmith Daily | 
