A.M. UPDATE

God morning.

I find it interesting that whenever there's some geo-political tension and the market goes down, the geo-political news is immediately blamed. However when this is happening in the context of a lateral base which was forecasted a week earlier and expected to move up, suddenly heightened geo-political events have little to no effect on the market, this was especially noticeable during the "Arab Spring", the market hardly reacted to any of it, much more oil barely reacted to any of it.

This morning we have the UN-descalation of Ukraine/Russian tensions as Nato's chief,Rasmussen says that the Russians have NOT pulled forces back from the Ukraine border, but have increased them and declares that there's a "High probability" that Russia "Intervenes" or you might say, "invades" Eastern Ukraine, this of course coming from the chief of NATO, not a newspaper op-ed.

At the same time this morning we find out that Iraqi PM Maliki wasn't massing troops in Baghdad to fight off ISIS/ISIL insurgents, but apparently to pull off a military coup as the Iraqi President's home is now surrounded by forces apparently loyal to Maliki who claims the president broke the constitution by not naming him in time for an unconstitutional 3rd term, even as Sunni's, Kurds and Shi'ites are all pleading with Maliki to step down rather than escalate tensions and a coup as ISIS bears down on Baghdad with full control of their water supply. At the same time the US is bombing ISIS in Iraq just as they are pleading with Maliki to respect the political/constitutional process and step down as the last thing Iraq needs is a coup/civil war as ISIS advances.

The market's reaction? Just as we expected Friday (with some caveats), UP!

 When a base like this is in place (note the likely head fake move at the vertical yellow arrow, a hammer breaking all support on increasing volume) it's not news that created it, it's a Wall St. construct, how else could we forecast it a week ahead and just Friday as being up this morning?


The caveat is the 3C concept of "Picking up where we left off " and a number of the averages (except the SPY) all left off with 1 and 2 min negative divergences which is why I was hoping we'd see an early in the week (Monday) pull back to add something like IWM calls or URTY long.

 Most of the averages have 1 and 2 min negative divergences suggesting that they pullback sometime earlier in the week, I suspect sometime not too late today, giving us a chance to establish some more short term piggy back longs (speculative).

While the larger charts through the base area like this SPY 10 min have clear positive divergences pushing the probabilities of a counter trend bounce very high, pullback or not today.

And the new reason all of this geo-political tension is being ignored? A foreign speech by the F_E_D's Fischer that was a bit more cautious on the economy....

People need to understand the market in 30 second sound-bites, that doesn't mean they understand the market.