The Strait That Matters - Weekend Edition

The S&P 500 fell 2% last week as the Strait of Hormuz effectively shut down, crude spiked above $85, and the February jobs report showed 92,000 losses. THOR's positioning - Nasdaq off, energy overweight, seven defensive and cyclical sectors running - looks prescient heading into a week loaded with CPI, PPI, and GDP data.

Last week was about one thing: oil.

The Strait of Hormuz - the chokepoint for roughly 20% of the world's crude exports - saw tanker traffic collapse 92% from late February levels. By midweek, only five vessels crossed in a single day. Debris from intercepted drone strikes damaged Saudi Arabia's Ras Tanura refinery. Qatar suspended LNG production at Ras Laffan, taking 20% of global LNG supply offline.

Markets responded accordingly. The S&P 500 dropped 2.0% to close at 6,740 on Friday. The Dow fell 3.0%. Small caps got crushed - the Russell 2000 shed 4.1% and the S&P MidCap 400 dropped 4.6%. The Nasdaq held up better at -1.2%, driven by a midweek tech bounce that didn't hold.

Brent crude pushed above $85 for the first time since 2024 before settling around $81. WTI cleared $85. Gold hit $5,181 per ounce, up over 2% as the safe-haven trade kicked in hard. Bitcoin went the other direction, sliding from $72,700 on Wednesday to $68,137 by Friday - confirming once again that crypto isn't the crisis hedge people want it to be.

The 10-year Treasury yield rose to 4.15%, and the VIX jumped nearly 50% through the week, pushing toward 30. Fear is back.

Then Friday morning brought the jobs report: 92,000 jobs lost in February, with wage growth still running at 0.4%. That's the worst combination - weakening labor market with sticky wages. It puts the Fed in a corner ahead of their March 18 decision.

No changes this week. Both funds maintained their current positioning through the sell-off.

THOR Index Rotation held its Dow/S&P 500 split with Nasdaq 100 off. THOR Low Volatility kept seven sectors active with Technology, Real Estate, and Financials sidelined.

That stability is the point. The system made its calls before the chaos. It doesn't chase headlines - it processes signals weekly and holds its ground unless the data changes.

Bullish

Near full equity exposure across both funds. Nasdaq-off and Energy overweight at 15.8% doing the heavy lifting. No reason to downshift when positioning already reflects the risks.

This is the scenario the market has been sleepwalking through for years: a real supply shock.

Since Russia invaded Ukraine in 2022, markets have shrugged off every geopolitical risk premium. Houthi attacks in the Red Sea? Priced out in weeks. China-Taiwan saber-rattling? Ignored. The "boy who cried wolf" phenomenon, as Bob McNally at Rapidan Energy put it - until the wolf actually showed up.

The wolf is here. Five vessels through Hormuz in a day. Saudi refinery damage. Qatar force majeure on LNG. Insurance rates through the roof. Analysts at Rapidan model $100+ oil if the closure persists beyond five weeks.

And the timing couldn't be worse. The labor market is cracking. Wages won't come down fast enough for the Fed. CPI prints Tuesday. PPI Wednesday. GDP and Core PCE Thursday. If any of those come in hot - and oil pass-through hasn't even hit the data yet - March 18 becomes a meeting where the Fed has no good options.

Energy-heavy, tech-light, cash-available. That's how you position for this environment. Not because we predicted an Iran escalation - we didn't. Because the system detected the regime shift in sector momentum weeks ago and allocated accordingly.

We detect regime changes, we don't predict them.

Behind the Ticker: Michael Monaghan, Founder ETFs
Brad sat down with Michael Monaghan from Founder ETFs to discuss the Founders 100 ETF and why companies still run by their original founders tend to outperform. Monaghan brings 20+ years from Goldman Sachs, Carlyle, and building his own defense tech company to the thesis that founder-led firms allocate capital differently.
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"Oil Tanker Traffic Halts in Strait of Hormuz Amid Gulf Strikes" - S&P Global
The definitive data piece on the Hormuz shutdown. Tracks vessel-by-vessel decline from 60 ships per day to near zero using Commodities at Sea tracking data. If you want to understand the supply side of the oil spike, start here.

"Closing the Strait of Hormuz" - Econbrowser
Jim Hamilton's analysis of what a sustained closure means for oil prices, modeling $108/bbl Brent under a full blockade scenario. Grounded in historical precedent and supply elasticity data rather than panic.

"The market can stay irrational longer than you can stay solvent - but it can't stay irrational longer than a closed shipping lane can stay closed." - adapted from Keynes, updated for 2026

Brad Roth
CIO, THOR Financial Technologies

This content reflects the opinions, analyses, and research of THOR Financial Technologies as of the date published. It is provided for informational and educational purposes only and does not constitute investment advice and should not be relied upon as the basis for any investment decision. Past performance doesn't guarantee future results, and all investments involve risk. For more information, please go to: thorft.com