Market Digesting News from the Ukraine

On Monday, the market continued a sell off that began last Friday. The S&P fell -13 points (-0.74%), the Nasdaq dropped -30 points (-0.72%), and the Dow lost -153 points (-0.94%).Volume was weaker than Friday's volume, but the bears were clearly in control. The Decliners beat Advancers by 2 to 1, and the down volume outpaced up volume by 3 to 1.

Midday, the S&P and Nasdaq both rebounded to erase about 1/2 of the day's losses. The S&P closed midrange near its opening price, while the Nasdaq closed above its open. Both indices were able to close above their respective 50 EMAs. However, given that the market was recently at 14-year (Nasdaq) and all-time highs (S&P), the market's decline can be viewed as a possible rejection of the new highs.  

Investors are no doubt concerned over the Russian military's takeover of the Crimea. This is a destabilizing geopolitical situation and it raises concerns over a potential war with Ukrainian forces. Stocks around the world fell on Monday, and oil prices jumped, so any escalation of tensions in the Ukraine could derail the current bull market in the US. It is important to remind ourselves that things could get worse in the Ukraine, causing further problems for the world markets.