• Thanks for reading my Diary today.

I would say the market bent today, but didn't break. Considering the strength over the last 18 months in the U.S. stock market it's a win for the bulls.

I continue to believe that the best reward vs. risk in the capital markets is shorting bonds.

I ended the day about 5% net long.

The flight to safety, to this observer, has a short half-life.

As an aside, I was impressed by Apple's (AAPL) close (an add-on today.)

Enjoy your evening and God bless Uncle Vinnie.

• Those who appear self-confident in view really have little clue.

Today and last week (both with regard to bulls and bears) are ample evidence why those self-confident in view really have little clue over the near term.

For that matter, 2014 is turning out to a year of volatility, uncertainty and lack of visibility.

Remember, avoid the self-confident (bulls and bears), and hide your children and investment portfolios from 'em!

• Here are his comments.

My buddy/pal/friend First Trust's Brian Wesbury clocks in on the crisis in Ukraine:

It's a huge week for economic data, and US stock indices just made new highs, but who cares ¿ Vladimir Putin sent troops into the Ukraine and this was blessed by a vote in the Duma. Previously, Ukraine's elected president, an ally of Russia, was forced from office for ordering troops to fire on protestors. That departure was ratified by Ukraine's parliament.

These events are tearing Ukraine apart. Russia has moved into Crimea, a southern peninsula of Ukraine on the Black Sea, where Russia has a major naval base, and eastern Ukraine, where Russia has natural gas pipelines. Many Ukrainians in the east support Putin and there are historical precedents for Russia's move. In 2008, Russia invaded South Ossetia. In 1938, Germany invaded the Sudetenland, which was part of Czechoslovakia. None of these ended amicably.

When investors see these headlines, some are understandably disturbed. We're concerned, too, mostly for the people in the region. As equity values decline, weighed down by fears that events may spin out of control, we think the market is providing another buying opportunity.

In August 1968, when Soviet troops put down an anti-Communist revolt in Czechoslovakia, the S&P 500 fell immediately, but was up 2.7% one month after the invasion. This does not mean that the Soviet invasion boosted stocks, just that in the broad scheme of things, the invasion had little influence on the market.

Ultimately, Putin, is going to do what he believes is in Russia's interest, which is probably an intact Ukraine run by an ally. For Crimea, and eastern Ukraine, to secede would likely push the rest of the country even further politically toward Europe and the West. This is the last thing Putin wants. Fixing elections, something Putin has been accused of before, to put a pro-Russian president in power, is another possibility.

We don't pretend to understand all the nuances, but don't be surprised at a negotiated "autonomy" for Ukraine's Russian-speaking areas (avoiding outright secession) that gives Russia their military bases and pipelines, without the crisis widening into a full blown war, civil or otherwise.

In the meantime, the weather is still playing havoc with data and activity, but stocks remain undervalued. The events in Ukraine point out the weakening position of the US in global issues, but this is a long-term problem that will have no short- to medium-term effect on our forecasts.

(Note: I offered my comments early in the day.)

• TBT's failure to rally is a bad short-term signal for the markets.

I view the inability of the ProShares UltraShort 20+ Year Treasury (TBT) to rally (for now) as a bad sign for the markets.

But that is a very short-term observation.

• Until then, I just plan to trade opportunistically.

I will establish my Direxion Daily Small Cap Bear 3X Shares (TZA) long under $15.70 and will add to my index and other shorts if and when the Ukraine situation is resolved.

For now, I just plan to trade opportunistically.

• Congratulations, pal!

It doesn't happen every day that someone you are friendly with and have known very well your whole life wins an Academy Award.

But that was what happened last night.

I wanted to deliver a special shout out to my pal Jeremy Kleiner, the executive producer of Twelve Years a Slave, who won last night's Oscar for Best Picture. 

In this Thank You Cam, Jeremy thanks his mom Darlene and his dad (and my tennis partner) Sam, who is watching with a big smile from above.

Last night at the time of the award, there was a slight rain in Palm Beach. It must have been Jeremy's dad's tears of joy.

Here is screenwriter John Ridley (also an Oscar winner), thanking the cast and crew and saying to Jeremy, "Jeremy, you made the film happen!"

• Here are his musings at midday.

Midday musings from Sir Arthur Cashin:

Ukraine spill-out is being measured in currencies and money shifts.

Some of the U.S. equity response looks like risk pare-back attempts to seek safety are apparent in gold, U.S. Treasuries, crude and elsewhere.

The selling has swollen U.S. volume a bit (Europeans raising capital??).

Run rate at 12:30 projects to an NYSE final volume of 720/800 million shares.  Stay tuned.

• So far.

I covered some Tesla (TSLA) at $236, reestablished longs in Ford (F) at $15.07 and General Motors (GM) at $36.05, added to Apple (AAPL) at $525 and added measurably to my ProShares UltraShort 20+ Year Treasury (TBT) long at $67.95.

• In a newsy market, it is best to be in a neutral position with plenty of firepower in the form of cash reserves.

Falstaff: The better part of valour is discretion; in the which better part I have saved my life.

-- William Shakespeare, Henry IV, Part 1: Act 5, Scene 4

I have always been of the view that in a newsy market, it is best to be in a neutral position with plenty of firepower in the form of cash reserves.

The market can go either way based on pronouncements from Ukraine, and while I remain cautious, I believe there will be a better time to focus on shorts when there is less geopolitical news out there.

As Grandma Koufax used to say, "Dougie, discretion (and good common sense) is the better part of valour."

• I covered some of my short this morning.

Tesla Motors (TSLA) goes flat.

I covered some of my short at $236 this morning.

I will add back on more strength.

• I have built a lot of cash up in last two days.

I covered my iShares Russell 2000 Index ETF (IWM) short, and I am out of my Direxion Daily Small Cap Bear 3X Shares (TZA) common and calls.

I have built a lot of cash up in last two days.

• I am 5% net long.

• I bought Ford and GM again.

I have reestablished longs in Ford (F) and General Motors (GM) this morning.

• I am slightly net long now. 

I aggressively added to Apple (AAPL) and ProShares UltraShort 20+ Year Treasury (TBT) on the whoosh lower this morning.

I am slightly net long now.

• ISM this time around.

The February ISM manufacturing index was 53.2, almost 1 point above the estimate of 52.3 and up from 51.3 in January, but it is still below the 56-plus figures we saw from August through December last year.

After falling 13.2 points in January, new orders rose by 3.3 points. Backlogs were up by 4 points, back above 50 at 52.0 and back in line with December. Production was weak, falling to 48.2 from 54.8, the weakest since May 2009 and follows the auto-driven drop in industrial production in January. Employment was unchanged at 52.3 at the lowest since June. Inventories at the manufacturing level rose 8.5 points, to 52.5, the most since October but remained below 50 at the customer level. Export orders fell 1 point, to 53.5, a five-month low. Lastly of note, prices paid held steady at 60.0 vs. 60.5 in January, which was the most since February 2013, due mostly to the rise in commodity prices. Of the 18 industries surveyed, 14 saw growth, but this diffusion index is just measuring the direction of change not the degree, so we can't define how much growth.

The ISM summed up the report by saying, "As in January, several comments from the panel mention adverse weather conditions as a factor impacting their businesses in February. Other comments reflect optimism in terms of demand and growth in the near term."

Bottom line: While we can't blame everything on weather, the beginning of February was still tough in terms of supply change management and is likely why the ISM is still below the levels seen before winter, albeit still off the softer level seen in January. Now that things have cleared, the pressure on the data to improve becomes obvious, as there is nothing else to blame (hopefully not geopolitics) for now.

I continue to add to ProShares UltraShort 20+ Year Treasury (TBT) at $68.00.

• The market is far too dangerous and unpredictable.

This is a great market to trade not to invest-- for now.

It's far too dangerous and unpredictable, stated simply.

In both directions.

• I bought more shares.

I added to my Apple (AAPL) long this morning.

• I am at my lowest gross and net exposure ever now.

• I am market-neutral and in an opportunistic trading mode.

• I still say I would prefer to be short bonds.

At some point, the market will rally from the Ukraine news.

The question I ask myself is whether I would rather be long stocks or short bonds once the Ukraine conflict passes.

I still say I would prefer to be short bonds.

• Run, don't walk, to read ValueWalk's piece on Warren Buffett. 

More on Warren Buffett  on Value Walk.

• Namely, personal income and consumption data from the Commerce Department.

Personal income in January rose 0.3% month over month, a touch better than expectations of up 0.2%. Spending was up by 0.4%, well above the estimate of up .1% but only because December was revised down to a gain of 0.1% vs. the initial read of up 0.4%. The savings rate was unchanged at 4.3%, matching the lowest since March.

As the headline PCE inflation deflator was up by 0.1%, real gains were seen in both income and spending after real declines in December. The year-over-year headline PCE gain was 1.2%, very benign but the most since July. The core rate was up by 1.1%. The reason why both the headline and core CPI ran at 1.6% instead was because of the greater contribution of rents, which are running near 3% year over year while the PCE has a larger contribution from medical care.

I think the Fed is making a mistake in not focusing on the CPI to the same extent as PCE because more households rent than at any time since 1995 and rents are rising well above income growth. Because of the sticky nature of services inflation and now the sharp rise in commodity prices where the CRB index is at a one-year high, I expect inflation numbers to continue their move higher in coming months. The two-year inflation breakeven is rising to the highest since April today and the five-year is at the most since August in response to the commodity price jump.

• It has breached 2.60%, so I am adding to my TBT long.

The yield on the 10-year note has breached 2.60% this morning.

My expected 2014 range is 2.50% to 3.00%, so I obviously like a short bond entry now.

I am adding aggressively to ProShares UltraShort 20+ Year Treasury (TBT) at $67.90.

• At $67.90.

I paid $67.90 for ProShares UltraShort 20+ Year Treasury (TBT) in premarket trading.

•  Warren Buffett's "Three T's" (Todd, Ted and Tracy) demonstrate cool and objective common sense analysis.

On Squawk Box, Warren Buffett's "Three T's" (Todd, Ted and Tracy) are demonstrating a cool and objective common sense analysis for which their mentor is famous.

They are Berkshire Hathaway's (BRK.A/BRK.B) "Tinkers to Evers to Chance."

And they represent Berkshire's future.

• Here are his comments on the crisis.

Sir Mark Grant on the Ukraine crisis:

"The Ukrainian question, which many governments and many 'socialists' and even 'communists' have tried to forget or to relegate to the deep strongbox of history, has once again been placed on the order of the day and this time with redoubled force...."

-- Leon Trotsky (April 22, 1939)

On February 23, 2014, according to the Independent, Vladimir Putin stated that the "territorial integrity" of the Ukraine must be maintained. This is a curious and telling declaration. Either Mr. Putin, as demonstrated by Russia's recent actions in the Crimea, has either told an out and out lie or, provocatively enough, he has told the truth and we are in for a far greater incursion than we have witnessed to date.

If Russia does nothing more than to take over the Crimea then he has not told the truth. If Russia presses ahead to take over Kiev and the rest of the Ukraine then Mr. Putin told the truth exactly. This is a very dangerous game of "Truth or Dare" and one with serious consequences not only for Russia but for all of Europe.

So far, in my opinion, the reaction of Mr. Obama, Ms. Merkel and of the European Union has been little more than bluster, the threat of economic sanctions and the dry smell of hot air. I listened to the Sunday talk shows and was bewildered by the lack of reality expressed by many Western politicians. They spoke as if eliminating Russia from the G-8 was going to humble Mr. Putin and drive him to give up his takeover of the Crimea. They either do not understand anything about Mr. Putin or they spent the weekend in Colorado someplace in a Rocky Mountain High.

"If you let a bully come in your front yard, he'll be on your porch the next day and the day after that he'll rape your wife in your own bed."

-- Lyndon B. Johnson

Markets, this morning, are moving violently. Oil is spiking, gold is on a rampage, equity futures across the globe are getting pounded, risk assets are moving wider and Treasury prices are increasing with each announcement of further events in the Ukraine. Russia has sold $10 billion of its reserves, according to the BBC, to buoy the ruble which is getting smashed along with the Russian stock markets. The chant of, "Hi Ho, Hi Ho, follow the Yellow Brick Road" of the past year has been drowned out by the click of the levers on the Kalashnikov rifles and the sounds of the military transports rolling across Crimea.

According to CNS News, during Putin's phone conversation with President Obama on Saturday, Putin hinted that Russian military intervention in Ukraine could go beyond Crimea, the region now under effective control by Russia. This is according to the Kremlin's brief account of the phone call. So far there has not been a military confrontation where shots have been fired but I honestly wonder how long this can go on when men with nationalistic desires face their counterparts and both have weapons at the ready. The silence is almost eerie and I doubt that it can last. If the Ukraine begins to move its army towards Crimea I would guess that the incursion will escalate into out and out war and then the movements in the markets to date may be little more than ripples by comparison.

"How horrible, how fantastic, how incredible it is that we should be digging trenches and trying on gas masks here because of a quarrel in a faraway country between people of whom we know nothing."

-- Neville Chamberlin, 1938

Idiocy often prevails for a time but then it evaporates and the field of dreams is seen for what it is---a field of nightmares full of guns and tanks and men trying to gain ground.

• That was quick!

I sold my small long rental in SPDR S&P 500 ETF (SPY) at $184.60 for a modest gain.

• At $184.25.

I bought a small SPDR S&P 500 ETF (SPY) long rental at $184.25 in premarket trading.

• It's the best risk vs. reward trade.

To me, the best reward vs. risk trade out of the Ukraine mess will be to short U.S. bonds, which have benefited from a flight to safety.

I plan to be a large ProShares UltraShort 20+ Year Treasury (TBT) buyer on weakness.

• Here is Peter's morning commentary.

The gospel according to Peter Boockvar:

Analyzing, forecasting and investing in markets is tough enough when just looking at the economy, earnings, company fundamentals, interest rates, monetary policy, market sentiment, and technical's but geopolitics is always the nasty pitch that comes out of nowhere. Most of the time it's meaningless in its market impact and even when its important such as in Syria or the Arab Spring over the past few years, its market influence is usually fleeting. While we cannot discount at all what is going on in the Ukraine because Russia is not some small, modest country, I would not be surprised if this week's market close at 4pm on Friday is more determined by Friday's payroll number and how people think the Federal Reserve will respond than what is going on in Crimea. That said, we must still look at the economic impact of what potentially may unfold with respect to direct activity and possible sanctions. It's also no coincidence that Jon Hilsenrath of the WSJ is already out saying that "Ukraine crisis unlikely to alter Fed's taper plans for now" but "it could affect economy through several channels" that they will be analyzing.

Russia joined the WTO in August 2012, is a major exporter of energy to the European region and the Ukraine is a major exporter of corn and wheat. All three commodities are up sharply this morning. From a trade perspective, the US did $38b in two way trade with Russia in 2013 according to the Census Bureau. According to the European Commission, Russia's two way trade with the EU in both goods and services was about $280b as of 2012 (latest full yr data they have). Russia is the 3rd largest trading partner of the EU and the EU is the largest trading partner of Russia. Also, up to 75% of Foreign Direct Investment in Russia comes from EU member states. With the world in total, Russia had two way trade of goods and services totaling about $665b in 2012. Thus, the problem with sanctions is that it may hurt the sanctioning countries as much as it damages Russia. In order to try to stem capital outflows, the Russian central bank hiked interest rates 150 bps to 7%. The Russian Micex index is down 11% and the ruble is down by 2% vs the US$ and 1.5% vs the euro.

Elsewhere, China's manufacturing PMI fell to 50.2 from 50.5 in February to an 8 month low but that was slightly ahead of expectations of 50.1. In contrast, the services PMI rose 1.6 pts to 55.0 to a 3 month high. The Shanghai index rose by .9% on the services improvement. After last week's weakness, the yuan is little changed. The manufacturing PMI's in Taiwan and Indonesia fell slightly m/o/m with both remaining above 50 but South Korea's PMI dropped below 50 at 49.8 from 50.9. India's PMI rose 1.1 pts to 52.5.

The manufacturing PMI in Europe was revised a touch higher to 53.2 from 53.0 led by an improvement in France whose index went to 49.7 from 48.5 initially. UK manufacturing was about in line with the estimate of 56.9. All these manufacturing PMI's come ahead of the national ISM in the US which is expected to rise 1 pt to 52.3 after falling by 5.2 pts in the month prior that many blamed on weather.

• At $236.

I covered some Tesla (TSLA) at $236 in premarket trading.

• Run, don't walk, to watch Warren Buffett on this morning's episode of 'Squawk Box' on CNBC.

This morning, "Squawk Box's" Becky Quick interviews Berkshire Hathaway's (BRK.A/BRK.B) Warren Buffett for three hours on CNBC.

This special edition of "Squawk Box" is always one of the best of the year, as Warren responds to questions and expands upon his annual letter to Berkshire Hathaway shareholders.

Warren's discussion this year will include first-time appearances by investment managers Todd Combs and Ted Weschler as well as by Tracy Britt Cool (financial assistant to the Oracle).

Becky knows Warren well and is not afraid to ask the tough questions, so this is expected to be particularly insightful.

• Here we go.

The rundown:

• S&P futures are down 18.
• Nasdaq futures are down 38.
• Crude oil is up $1.65.
• Treasury yields are down 5 basis points.
• Gold is up $22 and ounce.
• High-beta is getting schmeissed, with Tesla (TSLA) down $9, Google (GOOG) down $17, Amazon (AMZN) down $6 and Apple (AAPL) down $6.

• The current Ukraine/Russian confrontation will not have lasting market implications.

Quick hit:

• The odds favor de-escalation of the Ukraine/Russian tensions.
• Ukraine's military options are limited as the country suffers from structural weakness that undermines its strength.
• The West is reluctant to get involved militarily -¿ this will make Kiev hesitant to provoke Russians by using its military force.

While there are numerous reasons to be cautious on equities, my view is that the current Ukraine/Russian confrontation will not have lasting market implications.

• Ukraine's military suffers from structural weakness that undermines its strength. Its annual military budget is small (at only $2 billion) and a large portion of Ukraine's military equipment is in storage or has been inadequately maintained. As well, Ukraine's military is widely dispersed, and mobilization is difficult. Look for possible sabotage and bottlenecks as Ukraine's military will have to deal with disruptions from pro-Russian forces.

• Ukraine does not benefit from a military alliance system that it can rely on against Russia. NATO and the U.S. are not likely to intervene.

• Kiev's greatest weakness is the polarized nature of Ukrainian society and by extension the military.

• The transition government in Kiev understands that it cannot fully rely on the loyalty of the armed forces.

• Ukraine's military leadership has seen numerous changes of late, which highlights the lack of dependability at all levels.

• Both Russia and Ukraine have attempted to minimize bloodshed during the current crisis.

• Russians have sought to disarm Ukrainian forces without exchanging gunfire, while the Ukrainians have largely ceded Crimea with no fight.

• Both parties seem to want to avoid a conventional war.

• Ukraine's current military weakness and the West's limited appetite to escalate military actions will be major factors in Russia' reluctance to enter into a war.