Hard to discern whether the daylight visible at times, is dawn, or near dusk. The trading behavior may be similar against a typically bearish pattern from a more-intermediate perspective, but the variables do leave lots of uncertainty.

Clearly this comes down to the Fed aggressiveness in the face of recognition a lot of the inflation is related to 'supply', which they normally cannot effect like the 'demand' side of the equation. Throw-in the mixed messages regarding a deteriorating but also questionable diplomatic status regarding Ukraine, and it give us just what we've got in the market. A short-term toss-up and doubts as regards whether there's 'war on Wednesday', or 'Fed implementation' delays.

Well, at least Russia didn't attack Ukraine during half-time at the SuperBowl. It is essential to look forward, but we can't ignore the consternation of the critical moment, potentially in history, and with more challenges than stock markets. I am a bit surprised to learn, and you might find it interesting, that as most large airlines (including KLM, Lufthansa or others) have ceased service to Kiev as the crisis deepens, one airline is now flying Americans and other nationals out of Ukraine, as they don't normally operate there. It's Israel's airline El Al 787s. And besides Poland, the one nation expecting the most rail or auto evacuees from Ukraine, is Hungary. Budapest and Warsaw both will welcome 'visitors'.

The Fed is not necessarily on quite a revised pre-set course like St. Louis Fed Bullard suggested (and amplified on a Monday morning CNBC interview), the 25 basis points happens in March and sequentially, but all of this contradicts a possible more-gradual threading of this difficult needle for the Fed, which was the idea of reducing bond buying and the balance sheet, but not hike rates, or at least one or the other and not both concurrently, which freaks the markets.

Investment strategy has to also consider something overlooked by many over the last few weeks: COVID. So Ukraine and the Fed are very much in-focus for now, however the WHO over the weekend said there 'will be more variants' in the near future, and they might be more or less problematic for people. Sure it isn't what any of us want to hear, but when you talk inflation and 'supply' from China in-particular, it matters, and we have to presume the Fed knows they're not going to be able to change that, unless they break our economy so hard a lot of the population won't be inclined to spend on anything but necessities. Of course if things go that way, the nation will be in Fed-induced 'recession'.

In-sum: 

It's not secret that when inflation reaches the levels it is now, when it stops being background noise during which the Fed and politicians act stupid talking about 2% as a 'goal', when the word 'wage/term spiral' gets tossed around, the way out of it is to crush demand. It's crueler than usual when you have a Government wanting to spend more, lift wages, but not pay the price.

This is the price for being 'behind the curve' as forewarned all last year. Sure, recessions are terrible, but inflation is often worse, because inflation since it distorts the economy and deprives people who are not asset holders in ways that protect themselves from it. For sure that means the working class or poor too, but it even affects anyone in the upper middle class with a mortgage and a kid or two in school or just willingness to 'eat out' more than just rarely. Part of it may not 'really' hit them financially hard, but there's psychological impact, much of which could be tempered if the Fed moved much sooner, or now if a linear-thinking Fed actually thinks outside of the box and realizes they're way behind and cannot impact the supply-side, because it largely means China.

So, we have an idea that the 'Fed grasps' the strain on markets by moving too quickly (or threatening to), and technicians wonder if the market cycle is over for the past 2 years (omitting that internally it topped a year ago, not now), while everyone is glad COVID 'seems' to be retreating', while now collectively trying to comprehend what Russia is doing or whether War is Wednesday.

In the modern era with satellites and communications, you can't easily deploy armies on a mass scale without movements relatively easy to monitor. There is nothing 'stealth' about what Putin is doing, although he may surreptitiously have moved commando units into Eastern Ukraine, or collaborators in Kiev. I don't know if he's attacking Wednesday, a day of proclaimed 'holiday'.

What we do know is that no 'early admission' to NATO was forthcoming, and if there was a stomach to do so by some member-states, we don't hear any of it yet. Certainly Putin (even if he withdraws instead of attacks) already achieved the goal of Ukraine not joining NATO in the foreseeable future. Speculation is now centered on the idea of diplomatically neutering Ukraine to neutral status, sort of like Switzerland or Finland. That's the 'Finlandalization' you hear of. It's not an impossible compromise, but Kiev would have to initiate such a move.

In some member-state quarters, neutrality would be seen as capitulation, but I am unsure if it would be viewed as a 'Munich-style' appeasement, or relatively reasonable, considering the historical relationship of Russia and Ukraine. But, even if that occurred, the majority of citizens will remain angry with Putin, as a majority have friends or family 'in' Russia and absolutely didn't ask for all this.

So, Putin might have achieved more 'if' he can get neutralization of Ukraine in this, than if he occupies it and achieves bloodshed and permanent hostility. It is just one viewpoint of the moment (and I will likely change it), but dynamics of all this for now don't see how this goes well if he actually overruns it, which is not to say he can't, because he can, but perhaps it's extremely ill-advised.

We'll leave Europe alone with that, but if you want to talk about an immediate big-leg-down in the S&P, it would take 'either' an attack by Putin or a surprise rate hike by the Fed. Get both and you get a huge decline. Get neither and a resolution of Ukraine with a Fed clarification of moving gradually, you'd rally.

By the way, in case you didn't hear: Pfizer's (PFE) COVID pill-trio was approved by a normally resistant China, marking the first pill for COVID available over there. In this Country the Lilly (LLY) antibody nicknamed bambam was also approved. I'm unaware of any significant news developments related to followed stocks. Of course the ending of the 'bridge blockade' eliminates some supply stresses on both GM (GM) and our Ford (F). As to George Soros investing in Rivian (RIVN), who cares.

It is technically a bearish pattern, but as you saw before Bullard spoke of rate hikes and more, the S&P can change that pattern 'if' the backdrop allows. It's hard to draw big conclusions in this 'mix', which I called 'chop suey' stock market. It's stirring more into this soup that enhances alternative outcomes.

Rates are in a range that does start to effect risk assets, but the market is just crunched-up about Ukraine and the Fed, so you get stress tests that are sort of novel given these challenges hitting at the same time.

Everything remains 'rattled' says enough for now.