WASHINGTON, August 15, 2014 – According to a Reuters report, “NATO Secretary General Anders Fogh Rasmussen said on Friday a ‘Russian incursion’ into Ukraine had occurred overnight, but stopped short of characterizing it as an invasion.
Wall Street, which had started out in a positive mood Friday morning, quickly tanked—no pun intended—down roughly one percent as we write this early Friday afternoon, EDT.
According to Reuters,
‘Last night we saw a Russian incursion, a crossing of the Ukrainian border,’ [General Rasmussen] told reporters after meeting the Danish defense minister.
“It just confirms the fact that we see a continuous flow of weapons and fighters from Russia into eastern Ukraine and it is a clear demonstration of continued Russian involvement in the destabilisation of eastern Ukraine,” the Danish NATO chief said.
According to a preliminary CNBC report, it wasn’t surprising to learn that “Ukrainian artillery destroyed a ‘significant’ part of a Russian armored column that crossed into Ukraine during the night, President Petro Poroshenko told British Prime Minister David Cameron on Friday, according to Ukraine’s presidential website.”
In other words, Vlad the Impaler’s “aid” shipment to Ukraine was simply a diversion meant to hide the infiltration of more men, machines, and weapons into the Eastern provinces of Ukraine via a different route and under cover of night. Whatever tipped the Ukrainians off—their own surveillance or NATO assistance—they’ve apparently attacked the actual Russians rather than their infiltrators or fellow travelers in Ukraine, and it will now be interesting to see how Putin keeps his pledge to “avoid bloodshed.”
This is all nasty international politics, of course, heavily laced with that tasty, old time Commie goodness we old Cold Warriors remember so well, unlike this Administration’s “reset” marionettes. Veteran investors remember that, too, to the point where the world’s richest Communist sympathizer, George Soros, is said to be hedging the daylights out of his massive portfolio.
Everyone else appears to be panicking, at least mildly this afternoon, lest they carry too many long positions into a now unpredictable and likely chaotic non-trading weekend.
Charts and fundamental analysis go away at times like this, and investors and HFTs alike either bail out of profitable positions or hedge them via options while picking up gold and going short certain averages.
The usual, time-honored, counter-political gold accumulation play was complicated this morning by the powers that be (TPTB). With gold too happy at the $1300 per ounce level, they once again launched a massive bear raid on gold, smacking the metal down hard this morning instead of waiting for the usual Monday attack, catching traders off guard earlier. In turn, however, Russia’s latest move in their own “Game of Thrones” with Ukraine and NATO caught TPTB off guard. Surprise panic buying of the yellow stuff is at least for now stalemating TPTB’s bear raid slam.
We’ve picked up a bit of bullion ETF SGOL just for the hell of it this afternoon and we’ll see how things go. We’re also ready to pick up a substantial amount of shares in the short S&P 500 ETF (SH) if we can catch it at a lower price on some market rebound.
If things get more violent, we might try the leveraged 2x short S&P 500 ETF (SDS). That’s a slippery one, though, requiring you sit at your computer all day and have someone bring you lunch while-u-wait.
Otherwise, we’re not prepared to move much. Yet.
Bottom line. This situation could blow over. Or it could blow up. So be prepared to move, not sharply but deliberately.
Oh, yes. And try to have a great weekend, remembering that this is what happens when the U.S. pushes the “reset” button. And contemplate how good it will feel when the current batch of clueless amateurs in Washington begins to pack its bags at the end of 2016. No matter who wins. They will not be missed.