Putin Stands Down, Stocks Stand Up

Markets are rallying around the globe on a relief rally amid a de-escalation of the military tensions in Ukraine.  Putin decided to recall his troops that were conducting exercises on the country's border with Ukraine.

Asset classes such as stocks which were down yesterday are rallying the most today.  The Dow Jones is up almost 200 points in early trading.  Of course, its still early.  And safe haven assets such as Treasuries are selling off, pushing yields on the 10-year note up to 2.66%.

Commodities are also lower amid decreased fears of supply shocks.  Gold prices are lower near $1335 and oil prices are pulling back to $103.40.

The volatility index which also had a big spike yesterday is down 11% so far, back below the 15 level to 14.25 as of now.

Asian markets ended mixed.  The Reserve Bank of Australia held interest rates steady at 2.50% as expected.  Europe's markets are rallying across the board. ECB President Draghi said that inflation remains well below the ECB's target.

All sectors are rallying this morning.  Small-cap stocks are bouncing the most, and among the ETFs financials are getting a big boost as well.

Trading comment: What a difference a day makes.  Yesterday folks were talking about a new correction unfolding and identifying downside targets.  Today most indexes are at fresh new highs.  We continue to like the strategy of adding to fresh breakouts from consolidations or recent breakouts that have pulled back to support area.  But there are plenty of stocks that remain extended after big rallies that do not look attractive to add to until they digest their recent runups.