February 27, 2022

Stocks staged a dramatic sell-the-rumor, buy-the-news sequence over the past week, culminating in a selling climax Thursday that occurred as the invasion of Ukraine commenced.

The Thursday jump came as the market was finished discounting "the unknown" surrounding Ukraine. This is what occurred in '91 with the first Gulf War, and again in '03 with the second Gulf War. So this rally was in keeping with historical precedent, and not a big surprise.

However, Sunday evening, crude oil futures were up 6.2% as of this writing, a major move. This is believed to be caused by the West removing some Russian banks from the SWIFT messaging system that ties 11,000 banks together worldwide. This means some customers for Russia's oil & gas will not be able to transact business with it.

This would effectively remove some oil & gas from the market, putting upward pressure on energy prices and inflation. The Nasdaq, for its part, was last off 2.27% in the Sunday evening futures.

Otherwise, the short side is extended and unattractive.

On the long side, Palo Alto Networks (PANW), a cyber-security outfit, shows the best tone, but is up 19% in the last two days and may be ahead of itself.

In summation, it is important that we manage our mental capital so that when the real move comes we can follow our plan freely without "the last war" lingering in our minds. Nothing is on the Focus List. The short side is contemplated to be more attractive in the weeks ahead. This is due to a) the trend of the averages being down, and b) the Fed is on the cusp of a new campaign of higher short-term rates.

In the meantime, let's be open-minded as to the possibility of a SQQQ long if it develops this week.

Patience pays.

Kevin Marder

Trading Lessons
Introduction to the service (38:00)
Money management and risk management (20:27)
Bread and butter pullback (11:10)
Bread and butter pullback: Pt II (15:09)
Bread and butter pullback: Pt III (31:48)
Bread and butter pullback: Pt IV (30:16)
System R
Short-selling video (25:53)
Wyckoff spring setup (2:30) 
5-minute breakup test (8:01)