The Ukraine hysteria on Monday was almost too perfect; almost too per the script. One indicator that was done no good what so ever by the charge of emotion was the TLT-SPY ratio (one measure of risk ‘off’), which jumped as the least savvy players took the bait and knee jerked bearish as the media pumped the story. The subsequent reversal has damaged TLT-SPY, technically.
So if risk does not go ‘off’, where does that mean risk is? Well, risk would then be ‘ON’ in more ways than one.
Risk ‘on’ would mean further appreciation in assets and further degradation of the risk vs. reward ratio, which already sucks. A lousy RvR does not mean don’t play. It simply means that the market is at risk, similar to how silver was at 39>40>41>42>43…
