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I woke up at about 5 a.m. this morning. "The doors are shaking," my wife screamed. "The Russians are attacking," she said next. Wait, what? I thought this was a peacekeeping mission in the Donbas region, and that's about 500 miles from here. While I spent most of my life in the U.S. (Connecticut), I've been living in the beautiful port city of Odesa, Ukraine, for the past several years. I also have two newborn babies (twins), and now I have to worry about Russian missiles crashing down on our heads. Needless to say that I'm shocked to see my peaceful city turn into an essential war zone overnight. Oh, and those shaking doors in my house, later I found out that Russian cruise missiles are hitting military targets near my home.

The madness has officially started, and I don't see an end in sight. I went to get gas in the afternoon. After waiting in an armada of cars at the gas station for an hour, I heard a loud bang. Looking around, I saw the locals exit their vehicles with their cellphones in hand. As I looked back, a large cloud of smoke rose from beyond the treeline. The images are chilling, disturbing, and surreal at the same time. Later in the day, the doors nearly came off the hinges in my house as another blast rocked something not far away. Later, I discovered that a military base about 1.5 miles away got leveled. So, here we are, the unthinkable has become a reality, and I'm afraid of what may come next.

In my 20 years of investing experience, I've never seen a stock market drop by 50% in a single session. Yet, here we are, and the Moscow Exchange was down by 50% after reopening for trade this morning. The Russian market has come back a bit, but it's still down by 35%, and European stocks are also getting whacked.

While I thought that a Russian incursion into the Donbas area was possible, I did not consider that Russian cruise missiles would be blowing up military installments near my house. Furthermore, there are Russian helicopters over the capital city Kyiv now, and tanks are rolling in. Has the Russian president (Vladimir Putin) lost his mind? This unprecedented incursion could set the Russian economy back 20 years and should have a significant near-term impact on global stock markets as well.

Although the U.S. is well insulated from the conflict in Europe, the incursion in Ukraine will probably have lasting, widespread repercussions for the global economy. Moreover, the U.S. has a severe inflation problem , and the March Fed meeting is approaching.

S&P 500/SPX (SP500)

While the S&P 500 is making a solid rebound, we could head even lower from here. SPX touched down on the 4,100 support level before making a sharp rebound from the lows. The total peak to trough correction decline now stands at 15%. We're coming off significantly oversold technical levels, and the rebound is likely occurring due to the U.S.'s favorable geographical and economic position. Nevertheless, we still have the critical March FOMC meeting coming up in a couple of weeks. Therefore, stocks could decline further into the Fed decision, and I'm still looking for a near-term bottom around 4,000-3,800 SPX support.

The six months futures chart clearly illustrates that the uptrend is badly damaged. Moreover, SPX tripped below critical 4,300-4,200 support in recent sessions. While 4,100 is another critical support point, SPX will probably slide into the 4,000-3,800 region next if it buckles. On the upside, we need to move back above 4,200, then 4,350, and ultimately 4,600 resistance levels before the bearish technical image turns bullish again. Therefore, the risk remains to the downside, and the path of least resistance is still lower, in my view.

I cashed out several hedging positions in the All-Weather Portfolio today. Specifically, I closed out puts/collars in PayPal (PYPL), Advanced Micro Devices (AMD), SoFi (SOFI), Novavax (NVAX), and Palantir (PLTR). The following stocks were essentially the last of my high multiple growth stock positions. I began hedging these names a couple of weeks ago and the March 18 puts I purchased appreciated severalfold since I began hedging. While I could have held on longer, I don't want to be greedy, and today's panic-like atmosphere created good exit points. For now, I'm not making adds to my portfolio, as further downside into the March FOMC meeting is entirely plausible, in my view.

I will back up the truck if the SPX cascades into the 4,000-3,800 range. For now, I'm content with the relatively high cash position, around 19%. I will open additional hedges if SPX begins to cut through 4,100 support in the coming days.

Ironically, I own two Russian stocks in my portfolio, and they're both down by about 30% today. It looks like I was not the only one who thought that an all-out invasion was a low probability event. I will sell the two stocks soon and will probably never invest in a Russian company again. After this fiasco, the Russian economy will likely struggle for a very long time. Additionally, due to isolation and alienation, Russian stocks will likely command ultra-low multiples for a very long time.

As far as the Russian invasion, I think it's disgraceful, and people's lives are seriously being impacted, including mine and my family's. While I hope for peace, I realize that this may only be the beginning, and I hope to share more articles with everyone as we advance through these troubled times. I apologize for the short analysis. I wanted to share my experience. Also, it's been a long day, and the night could be even longer as there are whispers of a Russian invasion force taking over the city tonight. Soon we will see if that is the case—all my best to everyone in America and everyone else who reads this article. Please stay safe if you are in Ukraine!

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This article was written by

Hi, I am Victor Dergunov! It all goes back to looking at stock quotes in the old Wall St. Journal when I was 16. What do these numbers mean? I thought. Fortunately, my uncle was a successful commodities trader on the NYMEX, and I got him to teach me how to invest. I bought my first actual stock in a company when I was 20, and the rest, as they say, is history. Over the years, some of my top investments include Apple, Tesla, Amazon, Netflix, Facebook, Google, Microsoft, Nike, JPMorgan, Bitcoin, and others.

Disclosure: I/we have a beneficial long position in the shares of ASSETS MENTIONED either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.