Middle East Battle for Oct-Nov??? The winds of war are silent in the media, but they are out there.

Iran has just declared war against Israel and the US. It wasn't that long ago when a man named Osama bin Laden and the Al-Qaeda organization declared the same proclamation against us.

The US is gearing up for a war games with other Middle Eastern allies scheduled to start at the end of October. The USS Eisenhower Carrier Strike Group is making its way to the Persian Gulf to participate in this matter. That would beef up an already US presence in the Gulf due to the war in Iraq. As this unfolds, it will be interesting to see what reaction Iran will take upon this mock military exercise. As Debka.com reports, Iran might be prepared to take this opportunity to strike out at the US (click on the title of this post to see the Debka.com article).

What will this mean for the markets? Well this all depends on whether or not Iran takes action. The Iranian nuclear situation has already been forwarded to the UN Security Council to decide the fate of this dilemma. Iran has repeatedly said in the past that this course of action would be detrimental to negotiations. Should Iran attack this US/Allied war games, I would suspect Oil to break out of this current range. Gold (see previous post) would also rally as a possible war would escalate into reality. The current equity market rally would be cut short and a defensive posture would be the norm among market players. In short, it would be prudent to play the "very short term" on SELECT equities given earnings season is still happening. Yet it would be very prudent to remain cautious as to the undertones of what might transpire in the near future.

Be careful out there, utilize strict risk management techniques, and be wise to take note of possible developing actions.  ¶ 3:15:00 PM