Here are two snippets from last night’s market update:

Earlier this evening I received a news alert that President Obama has indeed authorized air strikes against Islamic state militants if they advance toward the city of Erbil, where the U.S. has diplomatic personnel. Upon receiving that alert I took a look at U.S. stock futures prices, as well as how the Asian markets were trading, and, as I suspected, everything was getting hammered. Dow futures were off over 160 points, and Asia was just plain ugly. Then, a little while ago, China’s most recent trade data was released, which showed its exports surging way beyond any economist’s expectation. As I type, the Shanghai index has rallied into the green and Dow futures have recouped about a hundred points. But don’t hold your breath: Barring the announcement of Russian troops doing a 180 by sunrise in the U.S., I’m doubtful that the China data bounce will hold. That said, I can’t tell you how many times over the past 30 years the market has totally surprised me and traded against what the headlines portended. You simply cannot time these things!

I’ll take a look at present short interest (tracks bets made that the market will drop) and the put/call ratio (another key sentiment indicator). I expect to find bearishness up, and traders looking to make money on a further decline. Which ultimately sets the stage for those out-sized upward bounces (as short sellers cover their positions [buy stocks] to avoid getting creamed when the market turns back around) once things begin to calm down. Don’t know when that occurs, or from what level, but that’s a prediction I’m very comfortable making (as long as I’m not guessing when it occurs).

Well, rumor has it that Russian troops are literally doing a 180. Which means—for only this moment mind you—that things have calmed down a bit. Which, as I suggested might happen, had bears covering some of their bets. Hence the 185 point bounce in the Dow. Again, that was an easy prediction to make, but utterly impossible to time (wasn’t expecting it today). And who knows, with the current fixation on geopolitical conflicts, where next week takes the market (good thing you’re a long-term investor, right?).

You’ve heard the old guard warn that Putin has ambitions that give zero regard to Russia’s economy. While I don’t doubt that if Putin were true to his ideology that this could morph into a holy mess, as I’ve suggested from day one (then here and here and here), Putin the politician, the global deal-maker, has to know better. His challenge now is to somehow withdraw while saving face with his people. I think…