Risk Off Overnight, Risk On Pre-Market

It actually makes perfect sense, the market popped yesterday and held, it seemed to know it was going to rally, but it also seemed to want to make sure Putin wasn't going to say anything in front of Russian parliament that would escalate tensions, giving the markets another version of that Putin Tuesday pop of several weeks ago when it seemed he had blinked, you may recall all of those gains were erased as reality set in. The same will happen with this Putin pop, , but for now this is the train we needed to get where we are going in any case so it works just fine, in fact sometimes I'm amazed at how the market knows so much so far in advance, it makes me think, "If the market knows, then being president of the free world can't be as hard as it looks".

ES Putin pop...

It's not so much what Putin said as what he left out, again like the last time the world thought Putin was cowed, he said Russia was not seeking confrontation with the West or in the East, he didn't react or rather announce Russia's own sanctions against the US or worse the EU, I'd think half the buying were the leaders of the EU who were afraid their sanctions (as weak as they could possibly be, to even call them sanctions is hyperbole) might end up in Gazprom shutting down the flow of NG to Europe.

ES is up on the news and it is following the EUR/JPY just as we surmised last Thursday in this post, Carry Trade Rotation.

Gold/GLD and GDX are down so that's also helpful to our positions.

Just remember how long the last Putin pop lasted before it was entirely erased as this will be too, but this is the kind of move we've been looking for over the last week to get VIX futures low enough to be accumulated so we know when and where the Pivot to the downside is (at the VIX accumulation level and just before the VIX futures pop).

These are the trains we need to take to get where we are going, if we can protect profits as we did Friday all the better, if we can add to profits in a dangerous situation as we did Friday with adding a few calls/longs, even better, but don't take your eye off the prize, the big picture.