GOLD Breaks Out

"Regardless of what's happened in the past, right now is a moment where the fate of Iraq hangs in the balance......Ultimately, this is something that is going to have be solved by the Iraqis" - President Barack Obama - June 19, 2014

The drama in yesterday's trading centered squarely on a weakening US dollar, a surge in the gold (+3%) rising Brent and WTI oil prices - pushing above $115 & $107 /barrel respectively to 9 month highs as the tension in Iraq increases.

President Obama did say that he was sending up to 300 US 'military advisers' to Iraq in response to the escalating crisis where Shiite's forces are battling Sunni rebels for control of the country and the country's biggest oil refinery as the world watches the country circle the drain.

There is no way that Obama will commit to sending troops to Iraq to help the government - at least not now and he also ruled out the use of American air power to stop the insurgents. OK...BUT - let's call it for what it is......can we NOW really just sit back and watch?

ISIS is now the richest and largest terrorist group in the world after they helped themselves to about $450 mil in cash taken from Iraqi banks during their push towards Baghdad. Does anyone really believe that the situation in Iraq will not go from bad to worse as contagion spills over into other neighboring country's (Syria ring a bell?) adding to the already heightened tensions in that part of the world? I'm just sayin......

Now although the stock mkt was little changed at the end of the day - Gold had a good day notching a $40 gain to $1321. A quick look at the chart reveals an inverse head and shoulders pattern - the left shoulder hitting a low of $1200/oz in July 2013, the head in December when we broke to $1190/oz and now the right shoulder here at $1240/oz. (the most recent bottom higher than the prior bottom - thus this head and shoulders formation.)

The fact is that the 'catalysts' in gold - the weaker US dollar (due to FED policy), surging oil prices and the geo-political unrest now enveloping Iraq are all adding to the 'fear premium' ..... but it also reflects the potential inflationary impact of higher oil prices on the global economy. [ In the past month alone we have seen WTI crude spike some 13% while Brent crude is up 10% as investors/traders price in the likely disruption of oil production. ] The surge up and through the 50, 100 & 200 DMA's screams of a breakout from the recent consolidation and a test of $1380/$1400 would not be a surprise in the weeks ahead.

Look - after the FED's most recent decision to 'hold the line on rates' - global mkts rallied on Thursday despite surging oil prices. However sports fans..... at some point...higher oil prices on a continuing struggling economy will take their toll on the mkts - so the obvious question now is: Will surging oil prices be the 'directional driver' for that long overdue correction in equity prices? We are about to find out.......

US futures are flat in early trading as traders take a bit of a breather and a more defensive stance. Traders remain cautious knowing that at any moment - the tone could change and change swiftly, yet - they are not ready to take profits for fear of 'missing out' on a further advance. Today is quadruple witching (see my Xerox sponsored CNBC "30 Seconds to know" explanation -

(http://www.cnbc.com/id/101738356).

Expect explosive volumes on both the open and close - as traders close out these quarterly option positions. There is no eco data due today so the focus will remain on the increasingly complex geo-political issues. I would not be surprised to see some weakness as we move into the end of day as the weekend approaches and so much can happen in those 72 hours. We continue to test resistance right here at 1950 ish...and would look for support at 1915 ish. Unless the Mid-East spirals out of control today - then I expect trading to remain relatively muted with a bias to the downside.

Here at home - Carl Icahn is at it again......saying that Family Dollar (FDO) should put itself up for sale IMMEDIATELY and he is willing to add 3 directors to help 'speed up the process'....this after he revealed earlier this month that he has amassed a 9.4% stake in the company causing a 13% surge in FDO share price on June 6th.

Oracle announced a big earnings miss after the bell last night - posting a 4% drop in profit as they disappointed on both the top and bottom lines....the stock is down 5% in pre-mkt trading.

Campanelle w/Fresh Summer Tomatoes & Mozzarella

A simple recipe for a busy weekend......

Campanelle Pasta w/Fresh Tomatoes and Mozzarella -

A great easy pasta dish - This is a classic Italian pasta dish....simple, easy, and so good for you. You will be amazed at how you can create this dish and look like a super star.....You will need: 6 roma ripe plum tomatoes, 2 cloves fresh garlic, s&p, 4 or 5 fresh basil leaves, olive oil and fresh "fresh: mozzarella and a box of Campanelle (bells)

In a pot of boiling salted water - add a box of Campanelle - these should take no longer than 8 / 10 mins to cook - so you must concentrate and work fast.

slice the tomatoes in half and then cut into bite size pieces by slicing in half again then turn and slicing twice to make 6 bite size pieces. do this to all of the tomatoes.

In a deep sauté pan - heat up olive oil - medium heat - enough to cover the bottom of the pan and add the crushed/sliced garlic. ( When you break the clove off of the head of garlic - take the knife and lay the flat side down and press on the garlic clove to crush and break the skin. Remove the skin and rough chop the garlic and add to the oil.... ).

Once warmed - not browned stir it around and add the tomatoes. Now season with S&P - smell how delicious this is. Next - cut the fresh mozzarella into bite size pieces by cutting a slice (1/4 inch) and then cubing it until you have cut the whole ball of Mozzarella.

Next - strain the pasta (reserving a mug of pasta water) and add to the sauté pan with the tomatoes/garlic. You may add a bit of the pasta water if it is looks a bit dry....but should not be. Move around to coat and keep warm.....now turn off heat - add the chopped fresh basil and the cubed mozzarella - stir to warm and serve immediately. Simple, easy and delicious.....