Ukraine and Bitcoin Headliners For Week Ending 28 Feb

Now, call me a pessimist all you want but events unfolding in Ukraine are quite disturbing, especially when you look at the similarities to events in the Balkan region just before WW1. Don't get me wrong, I am not trying to say this is WW3 in the making, but...

Looks like the long traditional standoff between the usual suspetcs in the Security Council is already unfolding, but this time it is more personal. Moscow still considers Ukraine very much Russian especially the Crimea region. It's obvious why Russia is a little twitchy on the whole scenario - see how I stay away from the word 'crisis.' Dig deeper on a different platform on how this geo-political standoff unfolds. The geo-political aspect of it aside, our job now is dissecting how the situation has and will affect the investment world. Politics to the politicians - right.

So week ending the 28 Feb 14 was dominated by headlines from Ukraine while the tail end of it saw news about Bitcoin filing for insolvency coming out of the East. The US markets opened the first day of the week with all time highs and further gains during the week saw markets with record closing on Friday. The bulls seem to be having a firm grasp of the market at the moment. Or do they? I sense alarm bells are already ringing on whether this is sustainable. Fundamentally in the US investors/traders keep on chalking up sluggish economic data – as highlighted in my update last week, hence the record highs for week ending 28 Feb 14.

Ukraine however seems to be throwing a spanner in the works for the bulls. Traders and investors alike are increasing getting anxious about instability in that region with the situation possibly proving a catalyst for an intermediate correction on both the US and global markets. Commodities will increasingly become an interesting play looking ahead into next week, with the price of oil looking to be the first to react. Any long term instability in that region can easily see oil going at a premium should the situation continue.

The Black Sea still remains the most economical route to ship oil. Already, Russia has began selling gas at a premium to Ukraine and Europe knows better than trying to antagonise and push the Moscow in a corner because the socio-economic impact of buying gas at a premium can easily cost local election votes at home.

On a different note, Bitcoin poses a serious and major threat to the traditional banking model. This threat has not to be ignored. The sever issues at the Bitcoin exchange last week left many well informed commentators a bit suspicious about who the true hackers where and their ultimate goal. The Central banking model and concept has finally awoken to the potential serious threat this new money model poses and it would not surprising if a few high profile hands are involved in the latest Bitcoin disaster. Try telling BP that petroleum was going to be replaced with water for use on every car to be rolled out of production and sold from this point forth. I wonder how they would respond.

Talking about cars, Telsa was also a headline act this week with news on its plans to build the largest lithium battery plant. Telsa made a convertible debt offering of about 1.6 Billion and has plans to increase its output capacity.

Looking ahead into this week I am going to be leaning more towards getting protection from ETFs because I am getting a little uneasy with (1) how the US markets have been far outstretched (2) combined with the situation in Ukraine. I think the markets might retreat a bit which could see defensive stocks gaining a bit of momentum. Gold ETFs could provide a good hiding place.

As for individual stocks, FB, DEPO, HCA are 3 on my stalking list.

Have a lovely week and happy trading.

'Its NOT enough to be BUSY, so are the Ants. The QUESTION is: what are you busy about'?