Monday Wrap: Red Dawn

Red Dawn

To people of a certain age, there is a genuine familiarity with the recent “red scare” sweeping the western world. To some, it is a reminder of how global macro events and political instability can sweep in with little warning and throw increasingly linked global economies off kilter. To others (like me), it’s an adorable throwback to a bygone era of awesomely epic 80’s movies.

Over the weekend, we were greeted with news that Vladimir Putin was threatening military action in the Ukraine. S&P Futures responded this morning by signaling a relatively large down opening.

The Russian stock market is crashing 12% right now. Look at this massive red candle $RSX $USDRUB: http://stks.co/s03JJ

— StockTwits Data (@StockTwitsData) Mar. 3 at 07:04 AM

 

The market never lies (only Traders do) and those that were listening may have already known all was not well in Mother Russia:

guys russia was already down 15% YTD coming into today. Selling there is nothing new $RSX $ERUS Russia & rest of EM are & have been a mess

— J.C. Parets (@allstarcharts) Mar. 3 at 08:07 AM

 

Though, as bad as this morning was and as this year to date has been, lets keep it real for a second:

$RSX (Russia) down 6.1%. Going back to 2007, this is 55th worst day. Guess today isn't so bad. Bad would be the 22.3% drop on 11/12/08.

— Ryan Detrick (@RyanDetrick) Mar. 3 at 12:09 PM

 

As the day wore on, emotions cooled as new information leaked out that suggested there may or may not be much backing up Putin’s tough talk. Correspondingly, sentiment began to shift:

In 2008, $RSX implied volatility was as high as 150%. 53% IV in March options last seen during 2011 eurozone crisis.

— Jared Woodard (@condoroptions) Mar. 3 at 08:48 AM


In other words, it looks like the options market is not quite convinced of Bremmer's "most seismic geopolitical event since 9/11". $RSX

— Jared Woodard (@condoroptions) Mar. 3 at 08:50 AM

 

Technical traders certainly noticed…

hard to deny the candle in $RSX today, dip got bought

— Derald Muniz (@1nvestor) Mar. 3 at 12:35 PM


$RSX Now more than a dollar off its pre-market lows

— Robert Lesnicki (@TraderRL23) Mar. 3 at 12:46 PM

 

And we’ll leave you with this delicious thought to ponder over dinner tonight, courtesy Jack Jones, aka @MacDee:

Not yet but relatively soon it will be time to buy $RSX and sell the US

— Jack Jones (@MacDee) Mar. 3 at 08:45 AM

 

Trade ‘em well,
~ Sean McLaughlin (@chicagosean)


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