• It was more profitable today than long equities.

"One last thing," part deux

 - Lt. Columbo

Yesterday I posited that shorting bonds would be more profitable than buying the SPDR S&P 500 (SPY) in a market rally.

Today, the ProShares Ultra Short 20-Year-Plus Treasury ETF (TBT) rose by 3% while the S&P Index climbed by 1.7%.

• Action in the Russell 2000

"One last thing." --Lt . Columbo

The last time the Russell 2000 index rose by 3% (and to a new 52-week high) was March 1, 2000. Buyer beware.

• I don't want to be tempted to make more sales.

To me, this is a day when algos have gone wild, and there are few sellers to stop the momentum train.

I am outta here early, as I don't want to be tempted to make more sales -- yet.

Thanks for reading my diary and enjoy your evening.

• It's gone plaid.

ProShares UltraShort 20+ Year Treasury (TBT) moves from ludicrous speed to plaid now!

• According to Reuters.

Reuters reports that the U.S. received prior and proper notification from Russia on its intercontinental ballistic missile test fire today.

• Namely, the March 14s for $0.92.

I just purchased Direxion Daily Small Cap Bear 3X Shares (TZA) March 14 calls for $0.92.

• Selling occurs.

Break in: Market drops a few handles on word that Russia fires an intercontinental ballistic missile from range in Astrakhan region.

As I mentioned previously, Kerry made hawkish comments in Kiev this morning.

I am not sure whether those comments provoked the missile launch, though.

• It appears I reached a bit for the Apple (AAPL) today.

I am a scale buyer for more in here.

• Didn't see this big a move.

10-year note yields now up by nearly 9 basis points.

When I purchased the ProShares UltraShort 20+ Treasury ETF (TBT) yesterday, I frankly would have given this about 50-1 odds.

• Looking to add to two.

I am bidding $15.25 for Ford (F) and $36.50 for General Motors (GM) add ons.

• Investment case is still intact.

With $10 billion of loans in Russia, Citigroup (C) is the largest-exposed money center bank.

Citigroup's shares have rallied by nearly 3% today after suffering from that exposure over the last few days.

While I am maintaining my long position in Citigroup (a Kass Katch) I would expect C to suffer on a relative basis until the Ukraine crisis passes.

In other words, C's shares face a more uncertain short-term future, though the investment case (for the long term) remains well intact.

• Seems prudent at $69.40.

I just took off some ProShares UltraShort 20+ Year Treasury (TBT) at $69.40.

• I forgot to mention it was $531.15.

My buy price on Apple (AAPL) today was $531.15.

• Here are his musings at midday.

Midday musings from Sir Arthur Cashin:

As Emily Litella might say ¿ "No more violins in Crimea".  Putin cancel of military exercise reverses everything-plus in U.S. but not fully in Europe. Putin may agitate (behind the scenes) in Eastern Ukraine (where most industry is).

This is not a settled issue but less direct military threat.

Run rate at 12:30 very similar to yesterday ¿ projects to a final of 650/730 million shares.

• The buyback program offers a backstop.

I am back buying Apple (AAPL) now.

I feel I am backstopped by the company's share buyback at around $515-$520.

• It is now outpacing the S&P 500's advance.

At $69.35, ProShares UltraShort 20+ Year Treasury (TBT) is now traveling at ludicrous speed and is outpacing the S&P 500's advance.

All good.

• Run, don't walk, to read Jim Cramer's 'Today's Unsteady Setup.'

Jim "El Capitan" Cramer's "Today's Unsteady Setup" is a succinct and thoughtful synopsis of a reasonable market strategy in the face of today's sharp ramp.

As to how the rest of the day will go -- I suppose it will be a function of the last program standing.

Kill the quants before they kill our markets.

• Secretary of State John Kerry gets hawkish.

• It's up over 7 basis points.

The yield on the 10-year US note is up over 7 basis points today (2.67%).

That is a helluva move higher.

Traders can take off some of their ProShares UltraShort 20+ Year Treasury (TBT); investors should hold on for a broader move, imho.

• My price is $530.

I am bidding $530 for more Apple (AAPL) now.

• Over $16.

Radian (RDN) trades over $16, and I am down to tag ends now.

• At $90.83.

I added to my PowerShares QQQ (QQQ) short at $90.83, taking me to 15% net short now.

• A photo finish for SPY and TBT?

SPDR S&P 500 ETF (SPY) and ProShares UltraShort 20+ Year Treasury (TBT) both are up 1.5% today.

• I'm adding it to the list at $120.

I am putting my iShares Russell 2000 Index ETF (IWM) on my Best Ideas list now at $120.

• At $119.59.

I reestablished an iShares Russell 2000 Index ETF (IWM) short at $119.59 just now.

Ford, GM and Apple are not faring well.

Thus far my buys of Ford (F), General Motors (GM) and Apple (AAPL) from yesterday are disappointing.

• I am 10% net short now.

• A good thing!

New high on Monitise (MONI.L).

A good thing.

• Check out this research report from Citi's Tobias Levkovich.

My buddy/pal/friend Citigroup's Tobias Levkovich sent me an email in response to my opening missive on 2014 likely being an environment of rising volatility.

Tobias agrees and sent me this research report and chart in support of our views.

• And I am putting the name back on my Best Ideas list at $15.05.

I am back buying Direxion Daily Small Cap Bear 3X Shares (TZA) at $15.05 and putting the name back on my Best Ideas list now.

• It is moving neck and neck with SPY.

ProShares UltraShort 20+ Year Treasury (TBT) is the world's fair this morning, and it is moving neck and neck with SPDR S&P 500 ETF (SPY).

Yesterday I posited that in a stock market rebound, I would prefer to be short bonds over being long equities.

• KBW downgrades Ocwen.

Ocwen Financial (OCN) is downgraded -- price target goes from $57 to $43 -- at Keefe, Bruyette & Woods this morning.

• Run, don't walk, to read James Altucher's 'The Ultimate Cheat Sheet for Dealing With Haters.'

James Altucher's (a.k.a., Grant Gates), "The Ultimate Cheat Sheet for Dealing With Haters" is just a marvelous read.

After coming back to Twitter six months ago, the haters seem to multiply like bacteria.

Life is too short to deal with the sharks who inhabit the Twitter seas in order to get to the good fish.

So I will tweet infrequently going forward.

It's too bad, as the platform can be a constructive means of delivering and sharing information.

• Here are Peter Boockvar's and Mark Grant's opinions on the Ukraine and market.

Peter Boockvar's "Never mind":

Nevermind, it was just a military exercise. Repeating what I said yesterday that most geopolitical events are usually fleeting in its market impact, mattering just one day is pretty impressive and this Friday's 4pm close will be most influenced by the US payroll number than anything else. Russia though now has to deal with the aftermath of its actions and will likely see a drop in FDI, a further taint in its reputation and Putin still knows he holds many cards in the geopolitical world with his energy business in particular as he said today "those who plan sanctions must think of consequences...sanctions against Russia would cause mutual damage." European markets are rallying strongly but most still remain below Friday's close while the S&P futures are retesting Friday's intraday high. After falling 11% yesterday, the Russian Micex is bouncing by 5% and the ruble has cut yesterday's loss in half. Putin even mentioned today the temporary nature politics has on markets. We'll soon see how temporary it is for Russia. The euro is up modestly getting back not even half of yesterday's selloff.

A few days after seeing a 1.4% y/o/y increase in inflation for January, Japanese cash labor earnings fell .2% y/o/y in January. The one bright spot though within the figure was regular pay rose .1% y/o/y, the 1st increase since March '12 as a 15% drop in bonus money was the main factor in the headline number. This comes ahead of the April tax hike and clarifies the main challenge Abenomics faces as it desires higher inflation, the consumer is getting squeezed. With the overnight yen decline, the Nikkei rallied .5%.

Finally ringing the cash register in the private sector, Ben Bernanke speaking in Abu Dhabi said he sees good reason for the US economy to grow by 3% helped by fiscal policy which he believes will be "close to neutral" in 2014. He also highlighted the recovery in household wealth helped by the recovery in the housing market. While Bernanke is certainly right that we've seen a great recovery in household wealth, it is where household wealth will stand when monetary policy is normalized that should be the proper measure, not while the Fed still has rates at zero and the QE power button is still on.

There is no economic data of note in the US today ahead of tomorrow's ADP jobs figure and the ISM services index.

And Sir Mark J Grant explores history:

"You were given the choice between war and dishonor. You chose dishonor and you will have war."

-- Winston Churchill's statement to Chamberlain after signing the Munich Pact with Hitler

The playbook is as old as human history. It is just that the technology is better. In World War II we had to rely upon wires, Morse code and jumbled radio broadcasts. Now it is live, in person and the transmission of video is almost simultaneous. Communication has changed; the deception of engagement remains unaltered.

On September 30, 1938, Adolf Hitler, Benito Mussolini, French Premier Edouard Daladier, and British Prime Minister Neville Chamberlain signed the Munich Pact, which sealed the fate of Czechoslovakia, virtually handing it over to Germany in the name of peace. Although the agreement was to give to Hitler only the Sudentenland, that part of Czechoslovakia where three million ethnic Germans lived. This was agreed to under the banner of Berlin demanding the right to protect the ethnic Germans. Skip forward seventy-five years and you may be able to replace Czechoslovakia with the Crimea. It is Deja Vu.

On March 15, 1939, during a meeting with Czech President Emil Hacha, Hitler threatened a bombing raid against Prague, the Czech capital, unless he obtained from Hacha free passage for German troops past the Czech borders. He got it. That same day, German troops poured into Bohemia and Moravia. The two provinces offered no resistance, and they were quickly made a protectorate of Germany. By evening, Hitler made a triumphant entry into Prague. Skip forward seventy-five years and you may be able to replace Prague with Kiev.

It is a time tested strategy!

The Munich Pact, which according to British Prime Minister Neville Chamberlain, had purchased "peace in our time," was nothing more than Britain surrendering to the expansionary goals of Hitler. This was appeasement at the cost of the lives of the citizens of Czechoslovakia. The results of this can be found in the history of World War II.

From The League of Nations Intelligence Agency

Geneva, Switzerland

Mission Europe Hostilities: Austria

"Hitler needed a success to boost nationalism and fast. He decided to take over the small area of Saar. He ran a campaign for the Nazi Party and by January 1935, there was a huge vote for Saar to join Germany...Hitler then marched soldiers into the demilitarized zone of the Rhineland right after hosting the Winter Olympic Games." 

Sound familiar?

Now we have Russia claiming that the deposed Prime Minister of the Ukraine is the rightful leader of the country. He has called for Russian troops to take back the Ukraine. Putin, this morning said that, "The overthrow of the Ukraine government was unconstitutional," according to Bloomberg news. Under this banner and to protect the "ethnic Russians from hostile attacks" you may see Russia sending troops out past Crimea where approximately sixteen thousand are stationed now. They have virtually annexed this part of the country and show no signs of leaving.

Moscow (AP) -- Putin: Russia reserves the right to use all means to protect Russians in Ukraine.

"With regard to the problem of the Sudeten Germans, my patience is now at an end!"

-- Adolf Hitler

Sanctions

The Telegraph reports today that Britain is preparing to rule out trade sanctions against Russia amid fears that the Ukraine crisis could derail the global economic recovery. Perhaps they are trying to "purchase peace in our time" once again? The United States has threatened trade and economic sanctions against Russia over their Ukraine incursion. Russia has responded this morning.

According to the BBC, Kremlin aide, Sergei Glazyev, said that the Russian response to any imposition of sanctions over Ukraine will be that Russia,"will have to declare the impossibility of returning those loans which were given to Russian institutions by U.S. banks." He further stated: "Russia will reduce its economic dependency on the US if Washington agrees to sanctions against  Moscow over Ukraine," the Kremlin aide stated, warning that the American  financial system faced a "crash" if this happened. "We would find a way not just to reduce our dependency on the United States to zero but to emerge from those sanctions with great benefits for ourselves." He added that Russia could stop using Dollars for international transactions.

 We now have a second front. The first is the military stand-off in Crimea. The second front is now taking place in the long and twisted halls of commerce where Russia and the United States may try to bankrupt each other as the result of economic sanctions being applied in retaliation for the assault on the Ukraine. The battle is not diminishing but enlarging to frightening proportions. The crisis is not waning but expanding. It may not be a war with tanks and machine guns but war it could be with Dollars and Rubles and the use of economic force.

This morning I heard from a friend of mine who is one of the world's central bankers. He said, "This story is over, move along."

My reply is crafted by what I think Mr. Putin is doing and echoes from the Land of Oz:

"Going so soon? I wouldn't hear of it. Why my little party's just beginning."

-- The Wicked Witch of the West

• Uncertainty and unpredictability are potentially destabilizing influences.

Yesterday's opening missivesuggested the Ukraine impact on the market would be minimal and short-lived.

The important message to me, however, is that the investment mosaic is increasingly complicated and subject to more shocks than ever before. The vulnerability to stock prices is further threatened by global monetary policy that prevents, at times, the natural discovery of prices.

You can call it black swans or just reality, but economic, policy, profit and geopolitical risks have increased geometrically in an aging bull market and with global economic expansion.

That is, in part, why I have been cautious on the 25% revaluation upward in 2013 P/E ratios.

It's unlikely that 2014 will be straight up, as has been the case of the past few years -- rather it will be volatile, as uncertainty and unpredictability are potentially destabilizing influences.

It will also probably be a fractal-busting year for the U.S. stock market during which special sauce believers are confounded and discovered to be swimming naked when the tide goes out.

In a volatile and more random (and trendless) market backdrop, charts will likely lose their predictive effectiveness, telling us less about the future of prices, though documenting from whence stock prices have come.

Depending on your risk profile, most should stay with large cash reserves, low and unconcentrated exposures, and trade opportunistically.

I am.

Hopefully, amid the chaos, our home run stock pursuit will pay off.

I am back to slightly net short with my SPDR S&P 500 ETF (SPY) shorts.

• From Michelle DiPippo.

The tweet of the day -- and its still early! -- is from Michelle DiPippo (a.k.a., @Michelle_01106):

I added further to Apple (AAPL) yesterday at about $525, as the reward vs. risk had improved over the last few weeks of a weakening share price.

• Opportunism can capture excess returns.

Probably 40% of my trades are pre- and after-market.

I find, especially in the case of dislocations, the market is inefficient, so opportunism can capture excess returns.

• I shorted SPY at $186.74.

Yesterday I wrote and warned that the market is too newsy for both longs and shorts, that I had covered most of my shorts and that I had moved to a 5% net long position.

I further stated that I planned to go back on the dark side once the Ukranian crisis passed.

With futures up 20 handles this morning and the Ukraine getting 610 million euros from the EU, optimism has returned to the markets.

Now it gets interesting.

Reflecting the ramp and the more sanguine Ukraine news, I have shorted SPDR S&P 500 ETF (SPY) at $186.74, and I have returned back into a net short position (albeit a modest one).