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The confusion has cleared this week. It is clear that the geopolitical issues we have been discussing for at least a couple of weeks have finally sunk in this last week. Crimea, Arab Gulf states, China-Japan, China-Philippines, Venezuela, and North Africa should have been enough to spook the markets, but the flight to safety seems to have accelerated towards the middle of the week.

Clearly this was a down week for the three indices I track. Yet, what makes this episode different than the consolidation-of-the-month affair, the last of which ended about five weeks ago, is that Gold (NYSEARCA:GLD) is appreciating, even on days that treasury rates are increasing, and treasury rates are falling even on days that the economic release are very bullish. This "break of logic" suggests that something else is at play; i.e. geopolitics!

Just for the record, the last correction was in the summer of 2011, and the last crash was actually the financial crisis whose end has just marked the fifth anniversary. Note also that the three indices notched high marks on the Friday of the week before.

The combination of all the above is quite worrisome to say the least. Will it be a consolidation, correction or a crash? Technical analysis are market following, but clearly Gold and Treasuries are sending a stronger message than what we saw in quite a while.

We shall see what this week brings, but this weekend should be pivotal. It is not clear what type of retaliation the West will attempt to inflict on Russia, but I am already seeing chatter relating to the certainty of both the secession and inevitable "consumption" of Crimea, as well as the sanctions to follow. This makes the first few days of the week pivotal in determining the depth of the financial market events that seem at this point certain to follow.

The economic numbers for the week (just ended) were quite fine, thank you! The only worrying number I saw was the PPI (Producer Price Index) which was unexpectedly deflationary.

For next week, we have a two-day Fed meeting which should include an economic update. It is not clear that this important event , the first to be conducted by Chairman Yellen, will amount for much considering the potential for paradigm-shifting geopolitical events transpiring earlier in the week.

In general, most sectors and issues in my trading set were punished, with the trend being more negative than the oscillator readings.

To conclude, the geopolitical overhang is something worth seriously watching, and possibly for more than just Crimea.

My regular table for the indices follows.

Index/ETF Symbol and NameDaily 3-EMA-7Weekly 3-EMA-7 Perceived Trend
SPXS&P 500 IndexPositivePositive Negative
DJIADow Jones Industrial AverageNeutralPositive Negative
COMPNASDAQ Composite IndexNeutralPositive Negative
GLDSPDR Gold Trust ETFPositivePositive Positive
VIXCBOE Volatility IndexPositivePositive Positive
FVXCBOE 5 Year Treasury Note Yield IndexPositivePositive Neutral
TNXCBOE 10 Year Treasury Note Yield IndexNegativeNeutral Negative
TYXCBOE 30 Year Treasury Bond Yield IndexNegativeNeutral Negative

As usual, the reminder is that the movement of the treasury yields is negatively correlated with the price of the underlying instrument.

As for my trading set, my short term "Perceived Trend Oscillator" stood at a "neutral" of -25%, which was also the low of the week. This compares to a "bought" value of 40% on Friday. In essence, the geopolitical risk seems to have won over the improving economics.

The full trading set table is as follows.

Symbol and Company NameDaily 3-EMA-7Weekly 3-EMA-7 Perceived Trend Is a Current Holding?
GERNGeron CorporationNegativeNeutral Negative Yes
JPMJPMorgan Chase & Co.PositivePositive Negative
GSThe Goldman Sachs Group, Inc.PositiveNeutral Negative
WFCWells Fargo & Co.PositivePositive Positive
NLYAnnaly Capital Management, Inc.PositiveNeutral Positive
MOAltria Group, Inc.PositiveNegative Neutral
TAT&T Inc.NegativeNegative Neutral
VZVerizon Communications Inc.NegativeNegative Negative
GPSThe Gap, Inc.NeutralPositive Negative
ANFAbercrombie and Fitch Co.PositiveNeutral Neutral
JWNNordstrom, Inc.PositivePositive Neutral
TGTTarget CorporationPositiveNegative Neutral
DISThe Walt Disney CompanyPositivePositive Neutral
MCDMcDonald's Corp.PositiveNeutral Positive
MDLZMondelez International, Inc.PositivePositive Neutral
BAThe Boeing CompanyNegativeNeutral Negative
LMTLockheed Martin CorporationPositivePositive Neutral
CATCaterpillar Inc.NeutralPositive Negative
DEDeere & CompanyPositivePositive Neutral
EMREmerson Electric Co.NegativeNeutral Negative
DOWDow Chemical Co.PositivePositive Neutral
ADMArcher, Daniels, Midland, Co.PositivePositive Positive
MONMonsanto, Co.PositivePositive Positive
POTPotash Corp. of Saskatchewan Inc.PositiveNeutral Neutral
PFEPfizer Inc.NeutralPositive Negative
BMYBristol-Myers Squibb CompanyPositivePositive Neutral
ABCAmerisourceBergen CorporationNeutralPositive Negative
AAPLApple, Inc.PositiveNeutral Negative
INTCIntel CorporationNegativePositive Negative
CSCOCisco Systems, Inc.NegativeNegative Negative
HPQHewlett-Packard CompanyNeutralPositive Negative
CVXChevron CorporationNeutralNegative Negative
BPBP plcNegativePositive Negative
NGGNational Grid plcPositivePositive Neutral
NINiSource, Inc.PositivePositive Positive
WMBWilliams Companies, Inc.NeutralPositive Negative
WMWaste Management, Inc.NegativeNegative Negative
CNWCon-way Inc.PositiveNegative Positive
CSXCSX Corp.PositivePositive Neutral
NSCNorfolk Southern Corp.PositivePositive Positive

Disclosure: It is important that you understand and agree that all information provided in this newsletter rely on publicly available data and tools with no guarantees of quality or suitability for any purpose, and that I can be long or short in any of my trading-set equities, at any time, with or without regard to indicated trends and described analytics, and that I do not give buy or sell or any other financial recommendations, and that any and all actions based on this commentary are solely the responsibility of the reader.

Source: Update: Week Ending March 15, 2014