NOTE: My friend and fellow market analyst Ken Seehusen produced some of my report today, as I am out of the office.—Jim

It’s a keen “risk-off” day in the market place Monday, following the weekend Russian troop invasion of Crimea, which is a peninsula of Ukraine. Russian jets have also reportedly violated Ukrainian air space. Gold prices pushed sharply higher Monday, hitting a four-month high, on the weekend developments in already unstable Ukraine.

To some, the Russian invasion was a surprise event. However, others could read the handwriting on the wall last week.

Many markets are seeing significant price reactions Monday, following the weekend Russian troop invasion of Crimea, which is a peninsula of Ukraine. Russian jets have also reportedly violated Ukrainian air space. World stock markets are under selling pressure, while the U.S. dollar index and U.S. Treasuries have rallied. Crude oil and the grain markets have also pushed sharply higher Monday, as Ukraine and the Black Sea region are rich in natural resources and the Black Sea is a major export hub. Military conflict in the region would very likely disrupt shipping of any commodity coming out of the Black Sea.

The U.S. and other Western nations are gearing up for economic sanctions to be slapped on Russia. However, it is very unlikely the West would initiate any military action, despite Russian troops occupying a sovereign nation. Economic sanctions levied against an already unstable Russian economy would have major ramifications for Russia and those world companies that deal with Russia.

Russia’s central bank raised its key interest rate by 1% over the weekend to try to ward off further weakness of the already slumping Russian ruble on the world currency markets. It’s not a pleasant notion to imagine a tattered Russian economy whose military still possesses major stockpiles of nuclear weapons that rogue nations would pay up dearly to obtain. Indeed, the Russian situation overall is and likely will continue to be a bullish underlying factor for safe-haven gold for at least the near term and probably longer.

The country of Ukraine was already on the verge of financial collapse and needs funding soon from outside sources. The International Monetary Fund late last week was moving quickly to provide funding to the Ukrainian financial system. However, the Russian invasion of Crimea likely stalled that planning.

In other news overnight China’s manufacturing purchasing managers index (PMI) fell to an eight-month low in February, showing a reading of 50.2 from 50.5 in January.

U.S. economic data due for release Monday includes personal income and outlays, the U.S. manufacturing PMI, construction spending, the global manufacturing PMI, the ISM manufacturing report on business, and domestic auto sales. Friday is the release of the key U.S. employment report from the Labor Department.

Wyckoff’s Daily Risk Rating: 8.0 (The Russian aggression and the Ukraine uncertainty have keen risk aversion in the market place to start the new trading week.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off), and 5 being neutral.

The STOCK INDEXES: The March NASDAQ 100 was lower due to profit taking overnight as it consolidates some of the rally off February’s low. Stochastics and the RSI are overbought and are turning bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 3613.43 are needed to confirm that a short-term top has been posted. If March extends the rally off February’s low, monthly resistance crossing at 3764.65 is the next upside target. First resistance is last Friday’s high crossing at 3722.50. Second resistance is monthly resistance crossing at 3764.65. First support is the 20-day moving average crossing at 3613.43. Second support is the reaction low crossing at 3596.75.

The March S&P 500 was lower due to profit taking overnight as it consolidates some of the rally off February’s low. Stochastics and the RSI are overbought and are turning bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 1814.09 are needed to confirm that a short-term top has been posted. If March extends last week’s breakout above December’s high crossing at 1846.50, the door would open into uncharted territory making upside targets hard to project. First resistance is last Friday’s high crossing at 1866.20. Second resistance is unknown. First support is the 10-day moving average crossing at 1844.65. Second support is the 20-day moving average crossing at 1814.09.

INTEREST RATES: March T-bonds were sharply higher overnight renewing the rally off January’s low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off January’s low, last June’s high crossing at 136-18 is the next upside target. Closes below the 20-day moving average crossing at 133-17 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 135-17. Second resistance is last June’s high crossing at 136-18. First support is the 20-day moving average crossing at 133-17. Second support is the reaction low crossing at 132-12.

ENERGY MARKETS: April Nymex crude oil was sharply higher overnight renewing the rally off January’s low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that signaling that sideways to higher prices are possible near-term. If April extends the rally off January’s low, weekly resistance crossing at 112.24 is the next upside target. Closes below the 20-day moving average crossing at 100.56 would confirm that a short-term top has been posted. First resistance is the overnight high crossing at 104.65. Second resistance is weekly resistance crossing at 112.24. First support is the reaction low crossing at 101.02. Second support is the 20-day moving average crossing at 100.56.

CURRENCIES: The March Dollar was higher due to short covering overnight as it consolidates some of last Friday’s decline. Stochastics and the RSI are diverging but are neutral to bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off January’s high, December’s low crossing at 79.50 is the next downside target. Closes above the 20-day moving average crossing at 80.43 are needed to confirm that a short-term low has been posted. First resistance is the 20-day moving average crossing at 80.43. Second resistance is the reaction high crossing at 80.91. First support is last Friday’s low crossing at 79.70. Second support is December’s low crossing at 79.50.

GRAINS: May corn was sharply higher overnight and spiked above the 25% retracement level of the 2012-2014-decline crossing at 4.80. The high-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are diverging but turning neutral to bullish signaling that sideways to higher prices are possible near-term. If May extends the rally off January’s low, the reaction high crossing at 4.93 3/4 is the next upside target. Closes below the 20-day moving average crossing at 4.54 1/2 are needed to confirm that a short-term top has been posted. First resistance is the 25% retracement level of the 2012-2014-decline crossing at 4.80. Second resistance is the reaction high crossing at 4.93 3/4. First support is the 20-day moving average crossing at 4.54 1/2. Second support is the reaction low crossing at 4.43 1/4.

May wheat was sharply higher overnight renewing the rally off January’s low. The high-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If May extends the rally off January’s low, the 62% retracement level of the October-January decline crossing at 6.58 1/4 is the next upside target. Closes below last Thursday’s low crossing at 5.88 1/4 would confirm that a short-term top has been posted. First resistance is the 50% retracement level of the October-January decline crossing at 6.38 1/4. Second resistance is the 62% retracement level of the October-January decline crossing at 6.58 1/4. First support is last Thursday’s low crossing at 5.88 1/4. Second support is the reaction low crossing at 5.67 1/4.

May soybeans were higher overnight and poised to extend the rally off January’s low. The high-range close sets the stage for a steady to higher opening when the day session begins trading. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If May extends this month’s rally, weekly resistance crossing at 14.88 is the next upside target. Closes below the 20-day moving average crossing at 13.44 3/4 would confirm that a short-term top has been posted. First resistance is last Thursday’s high crossing at 14.45 1/2. Second resistance is weekly resistance crossing at 14.88. First support is the 10-day moving average crossing at 13.79. Second support is the 20-day moving average crossing at 13.44 3/4.