President Biden is expected to announce this morning that the U.S. will no longer buy oil from Russia. That is causing a spike in gasoline prices to all-time highs, but the news is not unexpected, and the market reaction is mixed.
Breadth is running positive, with oil and commodity stocks leading the way, but new lows continue to pile up. There are nearly 800 stocks at new 12-month lows this morning. What has been most notable about the selling is that it has not been panicky. Even on Monday, when the S&P 500 had its worst performance since November, breadth was not extreme, and there were some signs of support in some areas of the market like biotechnology.
The primary problem for the market continues to be the great uncertainty created by the Ukraine crisis. No one is sure what Putin will do, and the economic fallout from the sanctions is going to be felt very fast. Gas prices are spiking by as much as 10% just today due to the new restrictions on Russian oil, and there is still the potential that the European Union may do something as well.
From a trading standpoint, the most important thing to keep in mind is that fundamentals and valuation aren't going to offer much protection. There are some stocks that are showing signs of finding some support, but it is very weak at best. There are still far too many big-caps that have not corrected nearly as much as the average stock.
Conditions are developing for some sort of snapback, but there needs to be a news catalyst to trigger it. Right now, the world is on hold while it waits to see what happens next in Ukraine.
I'm doing very little while I wait for further developments.