By Russ Winter of Winter Actionables
When I try to hazard a guess about what US policy is about, the word “duplicity” comes to mind. The Syrian crisis is no exception. Although WWIII is not out of the question, it is far more likely that the US has signaled to Russia that it’s client, Syria, needs to be taken out for a good caning.
We will likely get a video game shock and awe cruise missile attack on some command centers and military installations, hysterics and saber rattling, followed by a few days of “show” and stoogery on MSM. Afterwords, conditions will remain tense and unresolved.
Take a look at the extreme bullish speculator positioning in oil. As I have been reporting, the spec longs in oil are at absolutely nosebleed levels. And this chart was before this week’s spike. If ever a market was ripe for a fall, it is oil, and I have a strong hunch that once the caning is administered, that market will be liquidated “on the news.”
Source: Bar Charts
As I have been saying, mining shares will not be spared an oil spike. And Tuesday as the GDXJ bumped up against the 52-53 overhead resistance, the juniors reversed and had a nasty day.
The larger question is what happens when the GDXJ drops to 43-46 support, simultaneous with the duplicity caning, Syria action and oil price reversal? I think that’s when the GDXJ gets the mojo to power to get through the resistance and heads towards 70.
Paradoxically when the caning occurs and oil reverses down, physical gold and silver might correct some as well. This is tricky because it will stymie precious metal equity traders, and leave many at the gate on the equities.
My strategy has been laid out beforehand and discussed. We shouldn’t just have to react unprepared. Use the reserves accumulated of late to reload and hit your spots in stages at GDJX 43-47 as this unfolds.