Iraq Cities Fall to Terror Groups - Oil soars

Watching this disaster unfold before our eyes makes me sick beyond words can express. To realize how many of our men and women gave their lives or were horribly wounded and left crippled and shattered to secure the cities that have now been handed back on a platter to the terror groups looking to form their long cherished Islamic Caliphate, fills me with disgust and contempt towards an administration that has no comprehension how reckless its foreign policy is.
Better yet, it has no foreign policy whatsoever. Since when does one secure a country and then abandon it without having any sort of Forces Agreement in place?

Our top military generals who understood the region and were involved in the war effort there, all warned that this is exactly what would happen. They were ignominiously ignored by an administration that has snatched one defeat out of the jaws of victory after another.

Now what? I remember seeing those Iraqi citizens with their ink-stained fingers voting for their leaders. Now some of them are being beheaded.

Look, whatever your view towards the Iraq war might have been, it is now a fact that our troops have seen their blood, sweat, tears and sacrifice thrown away and spat upon by their commander in chief. Imagine if this is what we had done after WWII? I was watching one soldier's interview last evening who had fought in battles to secure these exact cities say he now understood something of what the troops who had fought in Vietnam felt when they watched the helicopters leaving Saigon.

Crude oil is rightfully now pricing in a disruption to world oil supplies as a result of the barbarians on the move. 

 Gold is rising higher as fear now settles in upon the world once again over the possibility of the major oil regions in the South of Iraq eventually falling under their control. One owns gold for these very reasons but if I hear a single gold perma-bull crowing about their yellow metal god rising and rejoicing on that account, I think I will spit out of disdain. The more I try to put myself in the place of those soldiers whose deaths have been so cheapened by this administration, the more I want to weep for my nation.

What a wretched and yet completely avoidable disaster. I feel like I am watching a slow motion train wreck of my beloved country unfolding before my eyes. In every area of the US, we are witnessing a disintegration of all that we hold dear. I am not sure what is worse - that this is happening so blatantly or the fact that nearly 50% of the US citizenry is completely ignorant of the demise of the nation. While they sit and watch their damned reality TV shows their nation is falling apart.

From a technical chart standpoint, crude oil has broken out above key chart resistance near $105 and is currently at a nine month high! Look for this market to be well supported as long as the Iraq oil fields and production are vulnerable. Who knows where this market might run at this point? It is now at the mercy of events on the ground in Iraq. As of yet, I have read of no planned response to the ISIS advance. Maybe our current administration will wait until Baghdad falls and then come up with something, whatever that might be.

In contradistinction to the trumped up sensationalism that was reported on the perma gold bull sites when it came to Ukraine, anything that impacts the world oil markets is a much more serious concern. Notice how bonds are being bid higher, equities are falling and crude is soaring. Markets really do worry about anything that deals with a major oil producing region because crude oil is the life-blood of the world's economic engine.

Copper is sinking lower on the news as it fears higher oil prices potentially choking further an already sluggish global economy. We were reminded of this with total's retail sales and the jobless numbers. Both served to reinforce the notion of an economy that remains fragile. Then one throws on top of that the potential for higher oil/energy prices, and it is not hard to understand the "oil tax" effect on growth.

Silver is following gold today instead of copper and has managed to best some selling near the $19.25 level that was holding it in check. With hedge funds on the net short side of the silver market, there is definitely some short covering occurring with this Iraq development.

Gold has easily punched through $1270 as the bears run for cover on this news. Now the big question is whether or not the bulls can take it up through $1280 and hold it there. If they can, we have something going.

I will get a chart of gold up later today _ I want to see how it handles itself later in the session and want to watch the mining shares to see if they can take out any key chart resistance levels. Letting the dust settle somewhat after these news events rock markets is sometimes the best thing to do before formulating a trading response. One can move in and out very quickly to take advantage of some short term price spikes or drops, but making a longer term strategic decision around something so volatile as this is unwise. Be careful that you do not build too large of a position in anything. Besides, it does not take much to make some nice short term gains when markets move this much anyway as a little can go a long way.