Market Update: Escalation...

I'm going to have to watch what's left of some not very impressive positive divergences on intraday charts the last two or so hours of Friday, in fact certain averages didn't have anything like the SPY, it was the Q's that had the best positive divegrence and that early strength or at least not a full on collapse was predicated on the divergences not being run over, a 15 min divegrence doesn't get run over very often, but 1 and 2 min ones are really like flies for what's going on in the world right now.

.Here's a look...

 As we saw late Friday not even the most sensitive 1 min chart could find a divergence on the SPY, it is in line which is price/ 3C trend confirmation, no analysis was based on this because there's no signal there other than what price is doing.

However as you may remember our AAPL set up (possible trade) from Friday and what we saw in the Q's late Friday made that set up seem more likely, it still does for now...

 QQQ 1 min has stayed positive since late Friday and even added a bit, that AAPL set up may just work, but this needs to be watched and I'll tell you why in a minute.

The QQQ 2 min chart also leading positive from the same time as the 1 min chart above Friday.

However, as I said, I didn't expect much as the divergence stopped there... 

 the 3 min QQQ is where there's a transition to in line and as you go longer it transitions in to the negative, thus my thoughts Friday that we wouldn't see a huge collapse early this week, maybe even a little strength, but I didn't expect it to last very long, the IWM is a good example as to why...

The IWM 1 min chart is now in perfect confirmation, no divergences and it's headed down on some recent escalation in the Ukraine.

As of Friday.. this was the other half of the analysis... 

5 min leading negative in the Q's so a 1 min and 2 min positive in the Q's can only take or hold us so far for so long, eventually (and not that long a time) we will see the market have to contend with this and worse, this is just the closest.

As to what's going on, late last night I mentioned Ukrainian forces were mobilizing from all over the country moving Howitzers, APCs and other heavy armor under the guise of "Routine military readiness drills", the mobilization over the weekend was anything but routine and it appears to have set the Russians off a bit as it may have been intended to, although the Ukraine and the rest of the West has been several footsteps behind Putin this whole time, if the leaders bought Putin's Tuesday olive branch like the market did then shame on them, the market doesn't know any better, they should have.

• RUSSIAN TROOPS OPENED FIRE DURING TAKEOVER OF UKRAINIAN MILITARY POST IN CRIMEA, NO ONE WOUNDED -INTERFAX QUOTES UKRAINIAN BASE COMMANDER

More... As Putin clearly sees the Crimea as Russia's, the referendum is less than a week is a mere formality, it's when the Eastern section of the Ukraine seeks the same that we have a REAL problem...

"Russian troops opened fire with automatic rifles during a takeover on Monday of a Ukrainian naval post in Crimea, Interfax news agency quoted a Ukrainian officer as saying.

The unnamed officer from the motor vehicle battalion of the Ukrainian navy said Russian troops broke in to the base near the inland town of Bakhchisaray some time after 2 p.m. (noon GMT), took mobile phones from the Ukrainians and began trying to remove vehicles. None of the Ukrainian troops was hurt and the base commander was trying to negotiate an end to the action.

Further details were not immediately available. Russian forces who have taken control of a number of military installations across the Black Sea peninsula have not so far exchanged fire in anger with Ukrainian troops."

As mentioned last night, "Putin might invite talks on Ukraine, but not Crimea which he sees as a done deal". In response Sec. of State John Kerry has cancelled his Russian visit...

• RUSSIA'S PUTIN SAYS TOLD FOREIGN MINISTER LAVROV TO INVITE U.S. COUNTERPART KERRY FOR MORE CONSULTATIONS ON UKRAINE
• RUSSIAN FOREIGN MINISTER LAVROV SAYS HAD INVITED KERRY TO RUSSIA TODAY, BUT KERRY SAID ON SATURDAY HE WOULD LIKE TO POSTPONE VISIT
• RUSSIA'S LAVROV SAYS RUSSIA HAS OWN PROPOSALS TO RETURN UKRAINIAN SITUATION TO THE FRAMEWORK OF INTERNATIONAL LAW, TAKING INTO CONSIDERATION INTERESTS OF ALL UKRAINIANS

I don't know if tensions will hold in check long enough for these baby divergences to get something off the ground, but I'd certainly be looking to add some positions that I've so far been very patient with such as VXX or UVXY long or any of the inverse leveraged market ETFs like SQQQ, SPXU, SRTY or SDOW.