This is certainly not going well:
As I've been saying, it's more likely we're consolidating for a move down than a move up but we're still hanging on by a thread as only the Nasdaq is red on our lower bounce chart – so far.
- Dow 36,000 to 28,800 would be a 7,200-point drop with 1,440 bounces to 30,240 (weak) and 31,680 (strong).
- S&P 4,800 is 20% above 4,000 and that makes it an 800-point drop with 160-point bounces so 4,160 (weak) and 4,320 (strong)
- Nasdaq is using 13,500 as the base. 14,100 is the weak bounce and 14,700 is strong.
- Russell 1,600, would be about an 800-point drop with 160-point bounces to 1,780 (weak) and 1,960 (strong).
We touched 14,100 this morning but bounced back quickly but the catalyst that's driving us lower is rising tensions in the Ukraine as the U.S. and its allies are withdrawing diplomatic staff from Kyiv in a sign Western capitals see diplomatic options narrowing. Companies are also taking precautions. Dutch airline KLM has stopped flying in Ukrainian airspace. Shares of Air France KLM, the Paris-listed holding company, dropped 5%.
Russia is the World's largest exporter of Natural Gas (/NG) and, fortunately, that was our war hedge over the weekend and we got a huge 0.15 bump in /NG this morning, allowing us to cash out with a huge profit (/NG contracts pay $100 per penny move). If Moscow were to attack and the U.S. and its allies responded with sanctions, the hostilities could affect the world economy and markets in unpredictable ways – so it's a very tricky week for the markets but all this is trading on rumor – so we can't take it too seriously and we need to get profits off the table.
IN PROGRESS
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