RISK OFF?

Today's timeline... (current market update at the bottom)

These are events that "may" have something to do with the risk off tone in the market intraday, specifically since just after the open, more specifically after Putin's speech in which it was interpreted that he's not going to escalate military tensions, but we saw the last Putin capitulation Tuesday and the market's idiotic response and then all of that taken back as Putin did exactly what anyone who knows anything about Putin would expect.


Ihor Baluta, governor of eastern Ukrainian region, says that Russian forces have been boosted along the eastern border (this has ALWAYS been the prize for Putin) and are concentrated 15 km away from the border along roads for a rapid invasion.

Russia is trying to create the situation unfolding now in the south here in eastern regions”

It's hard to tell how reliable this information is or how biased,  who wouldn't be nervous in this situation? However Putin played Crimea to perfection in which he let the game come to him, there are more than enough ethnic Russians in eastern Ukraine to try the same game plan and it would seem that is what he is doing as he has made clear that ethnic Russians would be protected, regardless of what country they reside in so he's already established the "Pre-emptive" invasion doctrine.

Ukraine's foreign minister says they will not accept Crimea's annexation.

As you already know Russia has taken up legislation allowing it to annex regions that want to join the Federation, I believe a vote is scheduled for this Thursday which will pass, so this morning's news couldn't have come at a worse or better time depending on which side of the border you are standing on...

"Mikhail Burla, head of the Transnistria region's legislature, has asked Russia's Duma for draft laws on accession to Russia to be altered to allow the region to join."

Like Putin Deescalation Tuesday in which the market thought he was cowed by the West's imminent threats of sanctions, it seems the algos misinterpreted Putin earlier pre-market in his speech about not seeking conflict...

Shortly thereafter... 

• *GUNMEN STORM UKRAINE ARMY INSTALLATIONS IN CRIMEA: UKRAINE DEFMIN SELEZNYOV
• *GUNMEN STORMING CRIMEA BUILDINGS SHOOTING IN AIR: SELEZNYOV
• *UKRAINIAN OFFICER WOUNDED BY LIVE AMMUNITION, HAYDUK SAYS
• *ATTACKS ON UKRAINIAN UNITS INCREASING: NAVY CHIEF HAYDUK

*RUSSIAN TROOPS BLOCKING 38 UKRAINE UNITS IN CRIMEA, HAYDUK SAYS- Now why would they do that if they want them out of their newly annexed region of Crimea? Perhaps to keep them from joining their comrades in defending Ukraine's Eastern border from a Russian incursion?

The strange one is US State Department freezing diplomatic and consular relations with Syria where the US and Russia first squared off, it seems there was a typo in the statement ordering all "Non-US personnel" out of the country, I'm sure they meant something like non military US residents, etc.

The US doesn't have assets in the Ukrainian region like they do in the Syrian region, perhaps a little flanking maneuver? If so, very ill conceived unless I'm missing something, I seriously doubt Putin takes his eyes off the prize because of a cheap stunt in Syria with no real consequences of any kind.

Later, around the time the market started going risk off, 

*UKRAINE SERVICEMAN KILLED IN CRIMEA ATTACK:RTRS CITING INTERFAX
Confirmation. And response...

• CONFLICT IN CRIMEA HAS MOVED FROM POLITICAL TO MILITARY STAGE - UKRAINIAN PM YATSENIUK
• UKRAINIAN PM SAYS HAS ASKED DEFENCE MINISTER TO ORGANISE URGENT MEETING WITH RUSSIAN, BRITISH, U.S. COUNTERPARTS
• UKRAINIAN PM: "TODAY RUSSIAN SOLDIERS BEGAN SHOOTING AT UKRAINIAN SERVICEMEN. THIS IS A WAR CRIME"

Interfax says that Russian Self Defense Forces (Crimean militia) were also killed and injured...

"

One self-defense fighter has been killed and two more injured in Simferopol, according to the Crimean news agency which cited a source in the republic's Interior Ministry.

The self-defense fighters were shot by a sniper from an uncompleted building opposite a Ukrainian military base, the source said."

Shortly thereafter... The former Ukrainian base is now controlled by pro-Russian forces and...

• *UKRAINIAN INSTALLATION SEIZED BY UNIDENTIFIED GUNMEN: SELEZNYOV
• *UKRAINIAN MILITARY UNIT UNDER ARREST IN CRIMEA: SELEZNYOV

Just about an hour ago...

*UKRAINE AUTHORIZES LIVE AMMO AFTER CRIMEA DEATH: MOTUZYANYK

Since...

Leading Indicators show HYG lagging the SPX. Sentiment indicators are still in line intraday with the SPX. VXX's intraday price comparison to the SPX is inline, even if the 3C charts look very different. Treasuries however are bid in what looks like a flight to safety trade, I'll have to look at them more closely along with their futures. As a result, one of my favorite leading indicators, Yields have dropped out of correlation and are below the SPX, they tend to pull the market toward them like a magnet, that would be down. Commodities are also underperforming notably.

Most notable is High Yield Credit (not the market manipulating HYG, but the uncorrelated is underperforming the SPX significantly, this looks like pure institutional risk off.

NYSE TICK has fallen out of bed with the SPX since 1:30, the moves in the SPY have no breadth (intraday) support from TICK data.

As for 3C, since the last update, the 1:42 move in the SPY not only has no TICK support, but intraday 3C which is where all of the action has been over the last 7 days also is not confirming, quite the opposite.

SPY 2 min

Worse yet, the 5 min chart which has not been part of the action looks horrible considering the amount of time.

As I said before about a week ago Monday, "I'm glad I have my short positions in order.

The other averages...

 QQQ 2 min at the 1:45 move.


QQQ 5 min

IWM 2 min has seen significant deterioration from earlier.

As has the 5 min here, this seems to be migration.

Meanwhile the steady pace of deterioration in HYG has picked up considerably and the VIX futures keep accumulating, but they seem like there was a specific target, in fact I'd guess that the move in the market up around 1:45 was not a risk on move, but a way to push VXX to where it was intended to be accumulated, we'll know soon enough.

I don't see this as being the time to take option positions, in other words timing doesn't seem to be exactly where we expect it to be nor are the signals, but it does seem there's an increased pace of activity to get them there.

I see some of the market moving stocks aren't doing so well, take NFLX down on the day pretty significantly or PCLN's stall.

More to come, I'm looking at near a hundred different assets.