A.m. Observations

Overnight the BOJ left policy alone and some say that caused disappointment and as such the carry trades flopped, the truth looks more like yesterday, watching grass grow.

 USD/JPY overnight and this morning.

As such the Index futures didn't see the typical overnight levitation, but I have no reason to think anything different than late Friday and yesterday, that we see a bump up in the market setting the pivot for a downside move as this top is more than mature.

The BOJ did seem to lie in saying...

*BOJ: EXPORTS HAVE LEVELED OFF MORE OR LESS 

*BOJ SAYS JAPAN'S ECONOMY IS RECOVERING MODERATELY 

As Sunday's the "Week Ahead" post cited, ..

Japanese GDP is the worst since Abe took over and their Exports posted the worst deficit on record.

In any case, I don't think that changes the immediate market.

In the Ukraine,Russian situation, the Guardian reports that "Ukraine's parliament has warned the regional assembly in Crimea that it faces dissolution unless it cancels a referendum it has called to join the region to Russia." A resolution, supported by a parliamentary vote, gave the Crimean parliament until Wednesday to call off the referendum, due to take place on Sunday.

Also on Tuesday, the acting Ukrainian president, Oleksander Turchinov, announced that a new national guard would be formed in response to Russian attempts to annex Crimea.

Turchinov said mismanagement of the armed forces under former president Viktor Yanukovych meant that the Ukrainian military had to be rebuilt "effectively from scratch". The acting defence minister said the country had only 6,000 combat-ready infantry compared with more than 200,000 Russian troops on its eastern borders.

President Putin has apparently rejected a U.S. proposal to resolve the dispute over Ukraine that had been put forward by Secretary of State John Kerry over the past week, according to senior Russian and U.S. officials. "Mr. Putin's decision led Mr. Kerry to put off a Russian invitation to meet Mr. Putin in Russia, as early as the beginning of this week in Sochi, to discuss the Ukraine crisis, according to these officials."

A pro-Russian force opened fire in seizing a Ukrainian military base in Crimea on Monday and NATO announced reconnaissance flights along its eastern frontiers as confrontation around the Black Sea peninsula showed no sign of easing. Ukrainian activists trying to cross into Crimea to show solidarity with opponents of last week's Russian military takeover there said they were halted by men in uniforms of the now outlawed riot police. One of these fired at close range, hitting a man in the chest, apparently with rubber bullets.

With diplomacy at a standstill, Russia said the United States had spurned an invitation to hold new talks on resolving the crisis, the worst East-West standoff since the Cold War - although Washington said later a meeting of foreign ministers was possible this week, if Moscow shows it is ready to "engage".

The U.S.-led NATO defense alliance said AWACS early warning aircraft, once designed to counter feared Soviet nuclear missile strikes, would start reconnaissance flights on Tuesday over Poland and Romania to monitor the situation in Ukraine, flying from bases in Germany and Britain.

The United States on Tuesday will also begin previously planned military training exercises in the region, the first since the Russian intervention in Crimea. A U.S. Navy destroyer will participate in maneuvers with Romanian and Bulgarian warships in the Black Sea, across from Crimea. In Poland, U.S. fighter jets will take part in joint exercises.

Basically nothing is resolved and things are spinning out of control faster than ever, all under the guise of military exercises.