I wondered why the market would cheer the reaffirmation of a cease-fire that never took effect, which was negotiated by parties that are not party to the events (except in Russia's case perhaps), how can someone like Angela Merkel declare a cease-fire speaking for the radical pro-Russian separatists?
Even if the European and Russian leaders negotiating a cease-fire supposed to be in full effect by Sunday were possible, it would only show the extent to which this is a proxy war between the West and Russia which we already knew, it's just not that clean and simple.
Earlier today there were reports of heavy fighting and the cease-fire not looking very promising, this is the same cease-fire, regurgitated and actually just a reaffirmation of the last one that didn't hold if it ever even started.
As for the participants, just a little over an hour ago, Reuters reported that the Ultra-Nationalist Right Sector leader Dmitry Yarosh said his radical movement rejects the Minsk peace deal and that their paramilitary units in eastern Ukraine will continue “active fighting" according to their "own plans."
In other reports, Ukraine government troops are not backing off or toning anything down either as it is reported that "Outgoing fire from the Ukrainian side was visible on the road between Kiev-controlled Kramatorsk and rebel-held Donetsk and rebels at a checkpoint near Donetsk said they had been hit by mortar strikes.
As for the understanding of a cease-fire from boots on the ground perspective, rebels manning checkpoints in Donetsk mocked the impending truce.
"What sort of ceasefire? Don’t make me laugh. This is already the second or third ceasefire," one said.
Apparently they did not get the memo, however, whether you believe the market was responding to the news or just a clear and east target of a head fake in the SPX, one thing seems clear, if the market had pinned any risk on moves to cease-fire hopes, they have been dashed as should have been expected, well before they started. You simply cannot control and enforce a ceasefire without a demarkation zone and boots on the ground enforcing such an action with repercussions from each sides's respective sponsors (the West and Russian), none of which is even a thought at this point.
This only increases the chances that US traders take risk off the table before the long/extended holiday weekend approaches as of today's close while the market otherwise had been in typical op-ex max pain pin form judging by earlier TICK until just several minutes ago when this happened...
IWM intraday charts lead negative intraday.
Someone has not been comfortable going in to the weekend, the a.m. action in to the early afternoon has been increasingly negative.
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