A Tale of Two Geniuses

Charts: The S&P 500 has formed an upward sloping wedge pattern. The outer boundaries currently for the wedge are 1364 on the top and 1334 on the bottom. When the index last hit the upper band of this wedge it formed a Doji Candle; this minor chart pattern within the larger wedge means that buyers and sellers are evenly divided on the overall direction of the market (as a group they are confused). The Doji Candle formation magnifies the importance of a break below the wedge, meaning further losses are likely if 1334 is breached. If the market breaks up out of the wedge, then further gains are likely with resistance at 1392. Wedge patterns in general mean that investors are confused. The current bull market has created lots of wedge patterns because we are in a time of maximum confusion and uncertainty.

Long War: When Osama Bin Laden was in charge of Al-Qaeda he stressed the importance of always attacking America above all else. OBL felt this way for religious reasons, i.e. America is the Great Satan and everything else is small potatoes. Back in the day, Al-Qaeda's #2, Zawahri, counseled against attacking America, and urged his peeps to get busy carving out pieces of the Caliphate in Africa by stressing cooperation among AQ affiliates.

Zawahri is now in charge of AQ. He is a military geniuses of the highest caliber. He invented the concept of suicide bombing, which entails religious education for children tailored to this end as well as all other aspects of Islamic culture in a given society. Essentially, every successful terror tactic in existence was invented by Zawahri.

Zawahri has at last fully taken the reins of the global terror network and his policy of local AQ chapters working together is bearing fruit. One example: Al-Qaeda in Iraq is sending huge numbers of fighters into Syria in an attempt at co-opting the rebellion there. I think the CIA has deliberately left the door open in Iraq for the bad guys, hoping they will commit acts of terror in Iraq, not in Syria. This is sort of working.

There are other examples. In Nigeria bad guys from Boko Haram are being caught who are clearly funded by AQIM. Funding is flowing into Al-Qaeda in Britain and bad guys are being caught there with their hands in the terror jar. This latter move is brilliant because Zawahri can say to the old diehards that loved OBL, "Yo dudes, I know you are itching to strike America, but take that energy and strike Britain instead, they both fit under the rubric of Great Satan and the Limeys are bunch of sissies who won't hit us back."

Zawahri doesn't want to strike America because he doesn't want to awaken a sleeping giant. He simply wants to build the Caliphate one country at a time, patiently carving out little jihadist kingdoms like Mali. Smart.

So the planet is a giant chessboard with CIA director Petraeus moving against Zawahri, two of the greatest military minds to have ever existed.