The market is still in downtrend phase. Tomorrow probably the US will re bounce and tomorrow we will see if it retakes the SMA 50 (1950).
If that fails, the rally is in trouble for real. The VIX is at 17.03 – just under the “sale area” 17.09.
– On the geopolitical issues.
South European banks continues to flash orange (specially Portugal and Italy).
Ukraine is a bit too much “out of sight”. The Ukrainian have been caught using short range ballistic missiles against the rebel. The rebel are a bit on a back foot. What alarms me of this strange calm is that the US Congress just approved a 19 million dollars to train the Ukrainian national guard in 2015. This is one pretty clear Russia’s red lines (US Army direct involvement in Ukraine).
Islamic State made some major advances conquering some oil fields (to be a Jihadi terrorist organization they seem very keen on oil) and more important they took over the Mosul Dam. The Mosul Dam is one of the a largest in Iraq and can be used as a weapon against Baghdad (both as water supply and literally unleashing flooding). Some ex Islamic State defectors clearly see the target of IS as Saudi Arabia as the main commanders of IS are Saudis. Saudi redeployed over 5,000 soldiers to the Iraqis border.
Israel is winding down the operations.
Ebola is still out of control. Being in Africa and not an airborne virus the probability of economic damage are pretty low.
Argentina fallout is mainly done, but all the credit high yield sector is under pressure,
This will be an interesting week where the FED will try and tranquillize the market with “off the book” purchases.
investorpolitico 