MFI approaching overbought, something to watch tomorrow. I think that's when the big dump happens.
Funny thing is, the US does little trade with Russia so the sanction have no direct effect but Germany gets half of its natural gas from Russia so it hurts Europe more than anything....
Regardless I see no compelling reason to buy stocks this week. Going long is high risk low reward.
Also when crap like this happens, ammo prices go up and availability goes down. I bought another case last week, if you own a gun I suggest buying this week.
Komentarz
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My best guess is still MFI going overbought then dumping. I'd rather wait and short the pop than hold a long position overnight.
Good luck.
Komentarz
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Note: ARKK and TSLA broken downwards out of a pennant last week, so I'm bearish until they hit the pennant target
Unfortunately, Russia has almost everything it needs in-house, and what it doesn't have in-house it gets from ally china. There are no sanctions the US or the UK can enforce that'll have much of an effect whatsoever. They have been a sleeping bear for decades now and I don't think the U.S. will like the response it gets if it starts poking at said bear. The Ukraine dilemma doesn't really involve the U.S. and it should stay that way. We'll likely never be true "allies" with either Russia or China due to philosophical differences, but we shouldn't go out of our way to be considered enemies either.
@digital_precision, direct sanctions have no effect other than natural gas sales to Europe, and it actually hurts Europe more than Russia. That alone is bearish.
If Russia decides to launch a full attack, NATO countries can enact a full sanction which punishes any country that trades with Russia and that's where China factors in.
That explains why China is approaching this cautiously, not to mention they're trying to make territorial gains of their own.
digital_precision
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@hungry_hippo, NATO hasn't allowed the Ukraine to join in... well.. forever. The world has also found it unimportant to enforce the obligations set forth in the Budapest Memorandum that clearly stated Russia had to respect the Ukraine's independence. Russia took over the Crimea in 2018 and no one did anything, best I can tell. I think it comes down to leverage.... and now the Ukraine has none. When the Soviet Union was dissolved they left an unbelievable amount of nukes in the Ukraine.....and at one point the Ukraine had the 3rd largest nuke supply in the world. The problem? Russia/Soviet Union had the codes. So as part of this Budapest accord the Ukraine destroyed the nukes in exchange for protection from countries such as the U.S., United Kingdom, and (drum roll please....) Russia. Oh the irony.
So in 2014 when the Russians took over part of the Ukraine called Crimea, we did nothing. Nor did anyone else best as I can tell. So we planted the seeds of future Russian takeovers simply because we indirectly said that we weren't going to defend the Ukraine. My guess is the Ukraine no longer has any big nukey nukeys and Russia knows this. So without neither nukes nor the apparent support of the U.S. and the U.K. Russia can basically walk in and do whatever they want. What are the Russian's motives.... that is what matters most to the U.S. If Russia is again amassing a nuclear arsenal and needs the Ukraine's resources to accomplish this then I can't imagine the United States sitting idly by. Either way, the U.S. kinda screwed itself by not doing anything in 2014 when Russia took over the Crimea in the first place. Now they (we) are in a very awkward position politically/diplomatically. Basically Putin is calling our bluff and he has good reason, considering we did nothing back in 2014.
What does this all mean for the markets? Volatility. It means Europe is in a VERY unenviable position because if they enforce sanctions Russia is going to cut off gasoline to the country, of which they are a major provider. Putin seems to be in the driver's seat here and he knows it.
So, do the ends justify the means to alienate Russia and perhaps China? Dunno. Not sure even Biden knows. Is Russia doing this with some hidden agenda of re-asserting it's name as a pre-eminent superpower via nuclear capabilities? Perhaps. Good news is we have an agency dedicated to just this sort of dilemma - the NSA. Bad news is you'll never know the entire truth when it comes to the NSA.....that's kinda their job - to protect and collect information. Methinks the NSA has a lot of the answers and Biden hopefully is getting thoroughly briefed on what they know. If the NSA can't help here, then their very existence is questionable in my opinion.
Anyhow, expect volatility. And expect it to be used as a valid sounding excuse for more selling for another 10-20%. For the next 10-20%, I expect "all news is bad news" will be the status quo.
hungry_hippo
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@digital_precision, it's natural gas that's the problem, not gasoline. Natural gas is harder to export/import, there are only so many LNG facilities. Not only is it used for heating and electricity generation, natural gas is the feedstock for many chemical companies.
Ukraine as you know has a lot of nuclear reactors, a dirty bomb is also a possibility.
As for Putin, it's all about egos. I said last week that there's no way he doesn't invade because he doesn't want to go down in history as a p*ssy.
If this blows up China is going to be forced to choose sides, because the only leverage left is complete sanctions against Russia which would include trade restrictions. China does way more trade with NATO nations than Russia though....