The market was on pins and needles early on rumors of Russia demanding Ukrainian forces in Crimea to surrender by 5:00 AM (EST) this morning or face an attack. Those rumors proved false after Russian President Vladimir Putin spoke for over an hour and said the Ukraine crisis won’t immediately escalate and that war was the last resort.
Futures immediately soared after showing strength throughout the night that lead to a strong open on Wall Street. The gains have held as the indexes have pushed record highs but the situation between Russia and Ukraine is by no means over. It has only moved to the back burner.
We mentioned Monday’s bounce off the lows was bullish and we have penciled-in higher prices into March with the indexes possibly challenging our December fluff targets. Of course, the rest of the week is full of headline risk but the bulls seem determined to push higher highs.
This is good news for us as we are still mostly long call options. We still need to be careful with opening new positions because March options expire in less than 3 weeks and April premiums are a little more expensive as they offer more time premium.
This means we can play possible earnings trades with March options and longer-term trades on fundamentals with April (or longer) options.
We do have a New Trade today as we have room for a quickie after being stopped out on our S&P 500 Spider (SPY, $187.28, up $2.30) trade yesterday. We still made 40% on the call options but the whipsaw action cost us some nice gains on today’s huge rebound.
Our other call option trades are showing strength so let’s go check the tape.
As we make the turn, the Dow is up 211 points to 16,379 while the S&P 500 is higher by 26 points to 1,871. The Nasdaq is surging 73 points to 4,350 and the Russell 2000 is zooming 32 points, or 2.8%, to 1,208. Wow.
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