Daily Wrap

Despite the main event this weekend, the referendum in Crimea, the US markets seemed fairly well pinned on an op-ex Friday and managed to stay in the last day's range while European stocks have seen the biggest fall in 9 months and Russian stocks are down -22% since Feb 18 and are in a bear market, the market hates uncertainty, all markets.

Kerry failed today at last ditch diplomacy while a US drone operating in Crimea was the victim of electronic warfare and crash landed right in to Russian hands.

Meanwhile, Russia is taking the referendum seriously which is and has been a done deal as they send in or pour in more and more forces, like this picture from today... one of many

Russia is clearly ready to enforce the referendum results, but in my view the prize is Eastern Ukraine as they made threats today based on what they thought was a pro-Moscow protestor being killed, which they used as a podium for pre-emptive action when it was actually an anti-Moscow protestor, it really doesn't matter, they are just waiting for the reason to invade the East , they don't need all of this equipment to hold Crimea when Crimean rebel forces are doing it on their own.

Where's the US and Europe? Making silly threats about costs that mean nothing to Putin, anything less than an aircraft carrier battle group and amphibious assault ships gathering in the region, Putin is ignoring everything as he can, he caught the US and EU off balance and moved quickly.

In any case, this is the weekend wild card event and I don't expect much resistance from anyone against Russia.

The US markets held up well considering the weekend events, they sold off in to the afternoon following the VIX, but strangely the VIX has a strong 5 min negative suggesting it moves down and the market up, not up enough for me to take long positions beyond some very small , speculative ones and that has nothing to do with Russia.

We also found out after last month's TIC data in which China sold the second largest amount of US treasuries ever, this week we saw foreigners selling the largest amount in the F_E_D's history, $104.5 billion on the week, just who is sanctioning who?

This may be a reason for the F_E_D to halt or slow down their exit from QE, which may be why the market is holding up better than other markets or than you'd expect.

As for other indications, Yields are intermediate disconnected negatively but perfectly in line with the SPX today, the VIX futures were leading the market by the nose...

VXX intraday vs inverted SPX...

And the VXX saw some late day distribution as did the 5 min VIX futures, you'd expect the opposite going in to the weekend.

HYG (High Yield Credit) , that market manipulating lever is still on deck and in position to ramp the market even though it has seen some deterioration over the week.

HYG 10 min positive and what looks like a head fake move that has already gone through the reversal process suggesting that the market makes a move to the upside very soon, say early next week/Monday (you know I hate dates).

It may work out if Crimea is annexed peacefully as I think the market has already discounted the fact that it's not up for grabs, it's Russia's already and the US obviously has no assets other than 1 guided missile destroyer in the area. However, if the Eastern border is threatened as there's a huge Russian build up, ALL BETS ARE OFF.

THE USD/JPY FOUND SOME SUPPORT AROUND $101.20 AS DID THE OTHER CARRY TRADE PAIRS, BUT THE LEADER STILL IS AUD/JPY.

AUD/JPY VS ES  today, there was a little more Es weakness in to the close, likely last minute profit taking on the Russian situation over the weekend.

AUD has found some support as long as it is leading and the Yen ...some distribution.

 Yen intraday distribution in to the closing hours and

the larger 5 min distribution.

It seems everything is in place for the market to bounce, it may do that on relief that Crimea didn't start world war 3 no matter how bad the outcome.

However as I mentioned in positions and positioning, other than taking time sensitive and fairly high profitable positions off the table for a potential bounce, I'm not ready to take much long risk at all, in fact I added no hedges/longs to the trading portfolio, just took gains in UVXY today.

We can't forget where we are...

 SPY 60 min off the last accumulation and now distribution cycle...

AND MORE DISTURBINGLY...

 DOW 1929 TOP...

DOW RIGHT NOW...

As for the P/L on positions closed today...

You can see why I wanted to protect the gains in PCLN which expires next week with over +128%

NFLX was about protecting gains at +25.5%

XLF at a nearly +46% gain

UVXY long equity at a nearly 13% gain

 March QQQ Puts expiring next week which were down about 90% at one point, I didn't think I'd get much better so I took the  31% loss

Overall or Options Tracking Portfolio (just tracking all ideas, not even run like a real portfolio as I'd never have so many positions diluting performance has come in with a 22.63% weekly gain ranking #7 of 720 competing portfolios, monthly at +11.89% and #30 of 1022 competing portfolios and over the lifetime at 289% and #39 of 1864 competing portfolios.

In any case I'm going to take a little day trip this weekend, the first in quite a LONG time, but I'll be monitoring events in Crimea Sunday and will have the Week ahead, but I expect we likely see a bounce and that should (as we have been looking for) give us a clear pivot signal to the downside via VXX and the signals there going positive short term on a pullback.

Have a great weekend!