"Something Wicked This Way Comes" is a 1962 novel by Ray Bradbury. It's about two 13-year-old boys in the Midwest, who have a nightmarish experience with a creepy traveling carnival that comes to their town in October.

October is a month that has sometimes been a very scary one for stock investors too. If something wicked this way comes in October, it is most likely to be a war in the Persian Gulf. The next two full moons over Iran will be Sept. 30 and Oct. 29. Israeli drones will have more light at night to assess the damage done to Iran's nuclear facilities.

If war is coming to the Persian Gulf, why has the price of a barrel of Brent crude oil plunged by $6.79 from a recent peak of $117.19 on Sept. 14 to $110.40 this morning? As I noted last week, the global crude oil demand-to-supply ratio is actually quite bearish. However, all the latest saber rattling between Israel and Iran should be adding a war premium to the price of oil.

Despite the recent weakness in the price, large speculators are once again holding near-record net long positions in both crude oil and gasoline. Maybe they know something. Or else, that could be a good signal for contrarians to short oil, especially if they figure that a war isn't likely. Alternatively, if a war happens, it would cause a temporary spike in the price of oil that would send the global economy back into a recession and oil prices much lower.

Source: Ed Yardeni — Ed Yardeni is the president and chief investment strategist of Yardeni Research Inc., a provider of independent investment strategy and economics research for institutional investors.