Trading Plan for 4/25

If not for headlines coming from Moscow… then would Thursday’s open have rallied 18 points, instead of dropping? Warnings to Ukraine peppering the tape coincided with the open, triggering a retracement of the overnight rally, plunging back under Wednesday’s lows.

Pattern points… (Setups and technicals)[pay]
Every past flare-up in the Russia-Ukraine conflict has had no lasting effect on the market. I don’t mean that in the same way that the market ultimately rallied after World War II ended. I’m saying that every reaction has proved to be knee-jerk, and quickly recovered.

The weekend invasion of Crimea triggered a drop that Sunday night, which was recovered to greet Monday well into positive territory. The two-week old Sunday night dip was recovered, too, albeit less forcefully. There have been other similar brief dips intraday. It’s nothing personal, Vlad, but market multiples and earnings growth aren’t that into you.

Now comes Thursday morning’s plunge.

To be sure, the plunge didn’t extend. But for its size, the session was a duplicate of Wednesday — trending down sharply at the open and then consolidating under prior highs. Sellers still appear to be weak-handed. But it’s interesting that stronger buyers didn’t exploit the headline driven drop.

[/pay]What’s Next… (Outlook and opportunities)[pay]
If they don’t compensate for the delay by surging Friday, then the Russia-Ukraine conflict may be starting to cause real damage. [/pay]

Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.