Energy Stocks Are Ripping Higher—Here's Our Top Pick
Play the Long Game: Why Game Theory Belongs in Your Trading Toolkit
In The Almanack of Naval Ravikant, Naval lists game theory among the essential mental models every person should understand. He doesn’t present it as an academic formula, but as a practical lens for seeing how people interact, how incentives shape behavior, and how the structure of a “game” determines who wins over time. It’s one of those ideas that seems simple on the surface, but becomes more powerful the more you apply it to real life.
That perspective is surprisingly useful in the stock market, where every trade is a move in a multi-player game.
What Naval Means by Game Theory
Naval isn’t talking about abstract equations; he’s talking about the rules of the game you’re playing.
Iterated vs. One-Off Games: An iterated game is one you play repeatedly with the same participants. Reputation matters, trust builds, and cooperation can be rewarded. A one-off game is a single encounter where the incentive is to grab what you can and walk away.
Positive-Sum vs. Zero-Sum: In a positive-sum game, all players can win (the pie gets bigger). In a zero-sum game, your gain is someone else’s loss.
Naval’s advice is simple: pick positive-sum, iterated games, and play with long-term people. That’s where compounding — of trust, relationships, and returns — happens.
How This Applies to Stock Market Trading
Treat the Market as an Iterated Game
You’ll be trading day after day, year after year. If you approach each trade as a one-off “beat the market now” move, you’ll be tempted to take reckless risks, chase tips, or front-run others. If you view it as an iterated game, you prioritize consistency, risk management, and staying in the game long enough for edge and compounding to work.
Avoid Zero-Sum Traps
Some trading styles are essentially zero-sum: trying to scalp tiny moves against professional HFT firms, or buying the hype right before institutions sell. Naval’s lens suggests stepping away from those games. Instead, focus on positive-sum opportunities — investing in businesses that grow earnings over time, where your success doesn’t depend on someone else losing.
Partner with the Right “Players”
In game theory terms, your “players” are the companies you own and the market participants you’re up against. Naval urges you to pick long-term players. That translates to owning businesses with durable advantages, honest management, and customers who keep coming back. You want to be aligned with players who are playing the same long game you are.
Reputation and Trust Compound
In iterated games, reputation compounds. For a trader, your reputation is your track record of discipline. If you consistently stick to your process, you build trust with yourself, which makes it easier to stay calm during drawdowns. That self-trust is a form of capital.
Know When Not to Play
Game theory also teaches you to sit out when the odds are poor. If the setup doesn’t meet your criteria, you fold — you don’t force a trade just to be in action. That patience is what keeps you alive for the next, better hand.
Bottom line: Naval’s inclusion of game theory isn’t about math; it’s about choosing the right kind of game. In trading, that means favoring long-term, positive-sum plays, avoiding zero-sum battles you can’t win, and playing with partners (companies) you can trust. Play that game well, and time becomes your ally. And in a market like this one — where headlines are shifting sentiment quickly, macro pressure is still creating sharp swings, and investors are being forced to separate noise from real opportunity — that mindset matters even more. This kind of environment can punish short-term, emotional decision-making, while rewarding traders and investors who stay disciplined, selective, and focused on the long game.
Review Of Last Trades
I did an $EQT trade on EQT Corporation through our Dynamic Power Trader services. Be sure to see last Thursday’s recording of the Live Trading Room here!
The DPT model identified $EQT as a long opportunity, and it was a strong example of how our system works to uncover timely setups with favorable upside potential.
The major difference between our paid and free services is execution. With the paid services, you receive SMS messages telling you when to get in and when to get out in a timely manner, which is critical when managing active trades and taking full advantage of the opportunities our models identify.
Current Trading Landscape
Stocks spent this week trying to stabilize, but the market never fully escaped the same macro burden that has been weighing on sentiment for weeks. The biggest force by far remained the war involving Iran and the ongoing threat to global energy flows. Every time investors thought the situation might cool, oil pulled back and stocks found room to bounce. Every time those hopes were challenged by fresh headlines, the market quickly gave that relief back. That kind of price action tells you a lot. This is still a headline-driven tape, not a fundamentally healed one, and that is why so many rallies continue to feel conditional rather than durable.
The week opened with a burst of optimism after President Trump delayed threatened strikes on Iranian energy infrastructure and hinted at productive talks. That helped spark a strong relief rally on Monday, with stocks moving sharply higher as oil fell hard from panic levels. But the very next day, that improvement already started to fray. Mixed signals out of the region, continued attacks, and confusion around whether negotiations were real or just temporary messaging quickly brought the market back to a more cautious footing. That was really the tone of the entire week in one sequence: hope, relief, doubt, and then renewed pressure.
The reason this story has had such a powerful grip on the market is that it goes far beyond geopolitics alone. Investors understand that a prolonged conflict in and around the Strait of Hormuz has direct consequences for inflation, consumer spending, corporate margins, and Federal Reserve policy. Oil may have pulled back from its most extreme spike, but it has stayed elevated enough to keep stagflation concerns alive. Gold also moved higher this week as investors looked for safety. When you combine higher energy costs with slowing confidence and less certainty around the inflation path, the market has a hard time fully embracing risk. Instead of broad conviction, you get defensive positioning, fast rotations, and a lot of second-guessing.
That pressure built as the week moved on. By the end of the week, the selloff had become much more visible. The Nasdaq 100 entered correction territory, the Dow suffered a sharp drop, and the broader market slid to its lowest levels in more than six months. Technology, AI-linked names, and memory-chip stocks led much of the downside as investors continued to reduce exposure to the highest-multiple parts of the market. For much of the week, the VIX sat in the mid-20s, which already reflected an uneasy backdrop, and by Friday volatility had moved materially higher as fear accelerated. At the same time, the S&P spent this stretch trading around its 200-day moving average, another sign that the market has moved into a much more fragile technical position than it had earlier in the year.
Macro data did not give investors enough confidence to push through those risks. Business activity slowed to its weakest pace in nearly a year, consumer sentiment fell to a three-month low, and inflation worries remained front and center. Producer prices came in hotter than expected earlier in the period, reinforcing the concern that disinflation could stall if oil remains elevated. The labor market has not broken, but unemployment indicators are starting to tick up enough to keep investors on watch. That leaves the market in a difficult middle ground. Growth is not collapsing outright, but it is cooling enough that higher prices, rising yields, and geopolitical uncertainty become much harder to shrug off.
Tariffs added another layer of pressure in the background. They were not the main market mover this week, but they remain an important part of the inflation story. Policymakers have already acknowledged that tariffs had slowed progress on inflation before the Iran conflict added a fresh energy shock. That matters because it reinforces the idea that price pressure is not coming from just one source. It is coming from multiple directions at once: oil, trade friction, supply strain, and still-firm input costs. That is exactly the kind of environment that keeps the Fed cautious and keeps investors from pricing in an easy policy pivot.
Treasury yields reflected that uncertainty all week. The 10-year yield remained volatile and stayed near the upper end of its recent range, roughly between 3.6% and 4.5%, with the market increasingly questioning whether cuts are really coming soon. That has been one of the most important undercurrents in this tape. If rates stay higher for longer while unemployment gradually drifts up, the market has to work much harder to justify stretched valuations. That is one reason leadership has narrowed so much. Energy and defense held up better when oil surged, while tech and other rate-sensitive areas struggled to hold momentum.
Earnings and company-specific moves reinforced the same broader message. Carnival became one of the clearest examples of how quickly higher fuel costs can pressure margins in this environment, even when demand remains solid. The company cut its annual profit forecast as oil-linked costs surged, which was a very direct reminder of how the geopolitical story is now feeding into bottom-line expectations. Chewy, on the other hand, offered a more constructive counterpoint. Its latest results showed that there are still parts of the consumer landscape with resilience, particularly where demand is more recurring and less cyclical. That contrast matters. Investors are not abandoning individual stories altogether, but they are becoming much more selective about where they are willing to pay for growth, stability, and execution.
That selectivity is really the defining theme right now. This is no longer a market where broad enthusiasm can lift everything tied to AI, tech, or macro optimism. Investors are asking harder questions about margins, guidance, capital spending, fuel exposure, balance-sheet strength, and pricing power. In other words, this has become a more disciplined market, and that usually happens when confidence in the macro backdrop starts to weaken.
My view remains market-neutral. Momentum has deteriorated, and the risk is still that rates remain higher for longer while labor conditions soften just enough to pressure sentiment further. At the same time, I do not think the long-term trend is broken. I still believe the SPY has a path toward the 680-700 area over the next few months if oil settles down, yields stabilize, and the data holds together. On the downside, I continue to view the 620-650 area as the key support zone to respect. For now, though, this is still a selective, skill-based market where discipline matters more than aggression. The market can absolutely rally on relief, but until the war risk eases, inflation cools more convincingly, and rates stop pushing against valuation, I think it makes sense to stay flexible, stay patient, and avoid mistaking temporary relief for a true all-clear.
See How I'm Hedging With $QQQ Puts and $SH (Real-Time Access)
Let me tell you something most traders don't understand:
Successful trading is not about being correct most of the time.
It's about being disciplined in managing your positions when the market goes against you.
Because the market WILL go against you. It always does.
The question is: What do you do when it happens?
Most traders panic. They sell at the bottom. They hold losers too long. They don't know when to hedge, when to cut, when to adjust.
And that's why they lose money even when they pick good trades.
I have a different approach. Find out here!
Sector Spotlight
There is one corner of the market that tends to matter even more when the rest of the tape starts feeling unstable. It is the group that can benefit when inflation worries return, when geopolitical risk disrupts supply chains, and when investors begin looking for cash flow, pricing power, and balance-sheet durability instead of pure narrative. That group stood out again this week as the war involving Iran kept oil elevated, gold moved higher, volatility stayed firm, and the broader market struggled to hold rallies. In an environment where the S&P 500 is fighting around its 200-day moving average and investors are questioning whether rates will stay higher for longer, areas tied directly to real-world supply and energy security start to look a lot more important.
That is why I think the case for this space is stronger than many investors realize. The story is not just about a short-term spike in crude. It is about a market being forced to reprice geopolitical risk, inflation risk, and the value of companies that can still generate meaningful earnings power when the macro picture gets messy. This week reminded investors that oil can move quickly when the Strait of Hormuz is back in focus, and when that happens, leadership often rotates toward businesses with direct commodity exposure, stronger free cash flow potential, and less dependence on falling rates or multiple expansion.
That brings us to the energy sector, which I think deserves real attention here. If the broader market remains headline-sensitive, inflation stays sticky, and Treasury yields remain volatile, energy can continue to serve as one of the more attractive places to look for relative strength. And within that group, SPDR S&P Oil & Gas Exploration & Production ETF ($XOP) stands out as one of the cleaner ways to gain exposure. Unlike a single integrated oil major, XOP gives investors broader access to the exploration and production side of the industry, which means more direct participation in the upside when crude prices strengthen and energy sentiment improves. That makes it especially relevant in a market like this one, where geopolitical tension and supply concerns are pushing investors back toward commodity-linked leadership.
What I like about XOP here is that it offers a more focused way to express the view that energy can continue to outperform if oil stays elevated and macro uncertainty remains high. This is the part of the sector that tends to respond more directly when supply disruptions, inflation fears, and global energy security become dominant themes. In a market where investors are becoming more selective and looking for areas with stronger near-term tailwinds, XOP gives you exposure to a group that could continue benefiting from exactly the pressures creating problems elsewhere.
My bottom line is that this sector fits the current market far better than many of the areas that led earlier in the year. The market is no longer rewarding hope as easily. It is rewarding resilience, earnings power, and businesses that can hold up when the macro burden gets heavier. With war risk still unresolved, oil still elevated, and broad confidence still fragile, I think $XOP deserves a serious look as a strong way to participate in a part of the market that may continue to benefit from exactly the pressures weighing on everything else.
Trade of the Week: EQT
My Trade of the Week is EQT Corporation ($EQT), and it is a name I am adding to my portfolio because it offers a very appealing way to stay aligned with the energy theme while leaning into a different but equally important part of the story: natural gas.
What makes EQT especially interesting right here is that this week’s market did not just remind investors about oil risk. It also brought energy security back to the center of the conversation more broadly. Disruptions tied to the Gulf have hit the global LNG market as well, with Reuters reporting damage to Qatari export capacity and disruption around the Strait of Hormuz, a route that typically handles about 20% of global LNG flows. That has pushed overseas gas prices sharply higher and made U.S. natural gas supply look more strategically valuable.
That backdrop matters for EQT because the company is built to benefit from exactly this kind of environment. EQT describes itself as the only large-scale integrated natural gas producer in the United States and says its strategy is to be the lowest-cost producer of natural gas, supported by core Appalachian inventory, large midstream infrastructure, and an investment-grade balance sheet. In other words, this is not just a high-beta commodity trade. It is a scaled domestic operator with a structural cost advantage in a part of the energy market that looks increasingly important.
The company’s most recent results support that case. EQT beat fourth-quarter profit expectations last month, with its average realized natural gas price rising 14.3% year over year to $3.44 per Mcfe. Management guided to 2026 production of 2,275 to 2,375 Bcfe and is also directing capital into infrastructure-focused growth projects, including compression, water systems, and the Clarington Connector pipeline. That tells me management is not just defending the business. It is positioning for stronger volumes, better connectivity, and more leverage to future demand.
The demand side is compelling too. U.S. power use is expected to hit record highs again in 2026 and 2027, helped by AI-driven electricity demand, while LNG exports have been growing rapidly and have already been a major source of natural gas demand growth. When you combine that structural demand trend with the global energy disruption we saw highlighted again this week, it creates a setup where high-quality domestic gas producers can start to look more attractive to the market.
The reason I like $EQT specifically as a trade from this week’s landscape is that it fits the tone of the tape. This is not a market rewarding crowded, expensive, rate-sensitive stories. It is a market rewarding selective exposure to real cash flow, hard assets, and businesses tied to supply-demand imbalances that can persist beyond a single headline. EQT gives you exposure to that theme through natural gas rather than crude, with domestic scale, operational leverage, and a business model that looks well matched to an environment where energy security, power demand, and global gas tightness are all becoming more important. That is why EQT is my Trade of the Week and a name I am adding here.
This week, I am adding EQT Corporation ($EQT) to my portfolio.
And one more thing! Our track record speaks for itself from the standpoint of a Winning Trades Percentage, Average Return Per Trade, and Net Gain. Just take a look:
The consistent performance of our services is just incredible. My historical stellar performance is made possible by being right on 82.32% of all trades that I made, with an average profit of 39.29% per trade on our collective trade recommendations. To my knowledge, this trading performance is one-of-a-kind and stands alone in the marketplace for superior trading advice, where our numbers and results speak for themselves.
As we enter Q2 2026, the market is becoming increasingly selective beneath an otherwise steady surface, with geopolitical tensions, tariff swings, and uneven megacap earnings shaping a more cautious tone. Interest rates have re‑emerged as a defining force as inflation expectations remain sticky, and labor market data is beginning to soften at the edges—creating a landscape where disciplined, data‑driven decision‑making matters more than ever. This is exactly where YellowTunnel becomes essential: our AI‑powered tools help you cut through noise, identify high‑probability setups, and stay aligned with the strongest pockets of market leadership. As conditions tighten and leadership narrows, YellowTunnel gives you the clarity and structure needed to navigate Q2 with confidence and precision.
Whether you’re focused on real-time trade opportunities, advanced analysis, or developing a disciplined trading mindset, we’ve got the tools and insights to guide you. As the year unfolds, let's work together to make 2025 the most profitable year for your portfolio. But remember—successful investing starts with informed decisions. Always conduct thorough research and assess your risk tolerance before executing any trades.
Let’s make this year a transformative one for your financial growth!
One more thing, I've had the opportunity to take additional action with a great organization supporting families in Ukraine directly. Gate.org is a foundation where fundraising is held for specific families, allocating funds to multiple families currently living in Ukraine. I am on the board of directors for this great initiative and encourage everyone to check it out and donate if possible. The war in Ukraine is escalating, and families are being negatively impacted and displaced daily. To learn more about this initiative to help families, please see the link below:
Wishing you a week filled with resilience, growth, and prosperous opportunities!