Politically incorrect post.
It seemed today, in the morning, that the stock market finally found some ground and started consolidating. To cool down bulls’ enthusiasm, afternoon trading renewed selling due to the renewed worries about Russian aggression against Ukraine.
I do not understand much how Russian tension can affect global markets so much that investors should be fleeing to dollar or Treasuries. I am not a global economist, but it seems irrational and crazy that the local problem on the other side of the world can spur such a sell off. Will Apple (AAPL) stop manufacturing iPhones and transform into a hand grenades?
Russians do not produce anything besides oil. Any bipartisan embargo will hurt the Russian economy, not the world or US economy (we have Obama and Yellen to do that job for us). Russia needs trading with the world, EU, or the US not vice versa. During the cold war, West didn’t trade with the USSR at all (or very little) and yet it survived. Isolate Russia for a year and it will back off.
The world is in chaos which proves how weak our leadership in WH is. The recent unsolved problems in Iraq got Obama’s approval for an airstrike attack (a Peace Nobel prize winner attacking “innocent” Iraqis?) which sent the e-mini futures to abyss right after his announcement. I wonder if he announced it from a golf course or he managed to get back to WH from his vacation to do the announcement.
The S&P 500 broke above 1900 in May 23, 2014 in a historic all time high move and stayed there since then. Today we dropped back below to this level to $1891.50 (-0.52% for the first time in three months.
Another metric I like to watch is AUD/JPY (Aussie dollar – Japanese Yen) which also would tell you about the trading mood at markets. Usually when institutional investors load up on Aussie dollar, the markets would go up. And on the other hand, when they dump Aussie dollar, market will follow the suit. As of now, the Aussie dollar is down to $93.96 (-0.56%) down from $94.60.
It is still early to say what tomorrow trading would look like, but as of now, we are looking an yet another selling day.
On the bright side, I could see a small improvement in implied volatility in the stocks I hold. I could see some relief and time decay eating up some value of the options I hold. That bumped up my net-lig by 2.18%.
Hold your breath for tomorrow. We will have yet another slide down this roller coaster!