Are we on the brink of World War 3? Russian fighter jets intercept US bombers! 🚨

In a significant development, Russian fighter jets were scrambled to intercept American military aircraft attempting to breach Russian airspace. The incident, involving US Air Force B-52N bombers and Russian MiG-29 and MiG-31 fighters, occurred over the Barents Sea, a marginal sea of the Arctic Ocean bordering Norway and Russia.

Russian Defense Ministry’s Statement

Russian state agency RIA Novosti reported that the Russian Ministry of Defense claimed their fighter jets were deployed to prevent US bombers from violating the state border. The Ministry’s statement indicated, “As the Russian fighter jets approached, the US strategic bombers turned away from the state border of the Russian Federation.”

Escalating Tensions Since 2014

This encounter is the latest in a series of escalating tensions between NATO and the Kremlin, a situation that has been simmering since NATO’s controversial involvement in Ukraine in 2014. The unlawful overthrow of Ukraine’s elected government has been a significant point of contention, fueling ongoing discord between Russia and Western military alliances.

Historical Airspace Violations

Russia has faced numerous accusations from European nations regarding airspace violations. On June 14, Finland reported suspicions of four Russian military planes breaching its borders, an allegation that came just days before the recent Barents Sea incident. Similarly, the Swedish Air Force intercepted a Russian military aircraft that violated Swedish airspace east of Gotland, a strategically crucial island for NATO due to its proximity to Russia and the Baltic States.

Sweden Strengthens Defense of Strategic Gotland Island

Sweden’s primary responsibility, and a key reason for its acceptance into NATO, is to maintain control over the island of Gotland.

The government of Sweden is exploring ways to reinforce the garrison on Gotland, a strategically located island in the center of the Baltic Sea. Gotland is pivotal for controlling the sea lanes in the region, providing Sweden and its NATO allies a significant advantage in securing the waters and airspace off Poland, Latvia, Lithuania, and Estonia. In the current European security environment, holding and defending Gotland has become increasingly crucial for the Swedish government.

Prime Minister Kristersson emphasized the significance of the Baltic Sea region, noting that Gotland’s defense involves not only troop presence but also surveillance and submarine capabilities. The strategic importance of Gotland extends beyond Sweden, impacting the security dynamics of the entire Baltic region. Strengthening the island’s offense capabilities aligns with broader NATO strategies to continue the expansion of NATO to Russia’s borders.

Finland and Sweden’s NATO Membership

The airspace breaches involving Finland and Sweden come in the wake of their recent accession to NATO. Both nations joined the Western military alliance under circumstances influenced by economic instability and soaring inflation, exacerbated by the disruption of Russian oil supplies. The pipelines supplying oil from Russia to these countries were sabotaged, creating a pressing need for economic and security reassurances from NATO.

Global Power Dynamics and NATO’s Expansion

The inclusion of Finland and Sweden in NATO underscores the broader geopolitical maneuvering at play. Critics argue that this expansion towards Russia’s borders demonstrates how global elites exert control over significant portions of the planet. The strategic moves by NATO to incorporate new member states near Russia highlight an aggressive stance that continues to provoke tension and military readiness from the Kremlin.

Aerospace & Defense ETF (MISL)

The First Trust Index Aerospace & Defense ETF (MISL) has a total of 34 holdings as of the latest update. The largest holdings in the ETF include:

1. The Boeing Company (BA) – 8.01%
2. Lockheed Martin Corporation (LMT) – 7.67%
3. TransDigm Group Incorporated (TDG) – 7.58%
4. RTX Corporation (RTX) – 7.54%
5. General Dynamics Corporation (GD) – 7.35%
6. Howmet Aerospace Inc. (HWM) – 4.61%
7. Leidos Holdings, Inc. (LDOS) – 4.44%
8. HEICO Corporation (HEI) – 4.40%
9. L3Harris Technologies Inc. (LHX) – 4.16%
10. Northrop Grumman Corporation (NOC) – 4.14%.

These top 10 holdings account for a significant portion of the ETF’s total assets.

MISL Technical Analysis

The chart shows the performance of the FT Indx Aerospace & Defence ETF (MISL) as of July 19, 2024, with key technical indicators analyzed for a comprehensive understanding.

Trend Analysis:
The price is currently in an upward trend, indicated by the 50-day moving average (blue line) trending above the 200-day moving average (red line). The recent candles show some consolidation, with the price closing at $28.50, slightly down by $0.20.

Support and Resistance Levels:

• Support: The 200-day moving average at $26.03 acts as a long-term support level.
• Resistance: The recent high near $31.00 serves as a resistance level.

Volume Analysis:
Volume shows moderate activity, with a notable spike in green bars indicating higher buying interest on certain days. The On Balance VolumeThe On Balance Volume indicator (OBV) is a technical analysis tool used to measure the flow of money into and out of a security over a specified period of time. It is a cumulative ... More (OBV) is trending upwards, supporting the bullish trend.

Relative Strength IndexIn the world of technical analysis, the Relative Strength Index (RSI) stands as a cornerstone tool for traders seeking insights into market momentum. Developed by J. Welles Wilder ... More (RSI):
The RSI is at 53.10, which is in the neutral zone, indicating neither overbought nor oversold conditions. This suggests a balanced momentum at present.

Stochastic RSIIn the realm of technical analysis, the Stochastic RSI (StochRSI) emerges as a powerful tool for traders seeking to navigate market dynamics with precision. Developed by Tushar S. ... More:
The Stochastic RSI is at 0.412, which is relatively low, indicating potential for upward movement if the indicator moves towards the higher end of the range.

Chaikin OscillatorNamed after its creator Marc Chaikin, the Chaikin Oscillator stands as a formidable tool in the arsenal of technical analysts. This oscillator is designed to measure the accumulati... More:
The Chaikin Oscillator is at -46,366, suggesting bearish divergence. This might indicate that there could be a potential slowdown or reversal in the current trend.

MACDThe MACD indicator is essentially a momentum indicator that shows the relationship between two different moving averages of price. The MACD is the difference between the 12-period ... More Oscillator:
The MACD line is at 0.13, with a signal line at -0.05, and a histogram reading of 0.17. The MACD is showing bullish signs as it is above the signal line, but the momentum appears to be weakening slightly.

Time-Frame Signals:

• 3 Months: Hold. The current trend shows stability with potential for moderate gains, but confirmation is needed from the RSI and MACD for a stronger buy signal.
• 6 Months: Buy. The upward trend supported by the moving averages and volume analysis suggests positive momentum in the medium term.
• 12 Months: Hold. While the long-term trend is bullish, the Chaikin Oscillator indicates caution, and further confirmation is needed.

Past performance is not an indication of future results, and this article should not be considered as investment advice. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions 🧡.

Global X Defense Tech ETF (SHLD)

Here are the largest holdings in the ETF:

1. RTX Corp (RTX) – 8.09%
2. General Dynamics Corp (GD) – 8.04%
3. Lockheed Martin Corp (LMT) – 8.03%
4. Northrop Grumman Corp (NOC) – 7.41%
5. Palantir Technologies Inc (PLTR) – 5.30%
6. L3Harris Technologies Inc (LHX) – 4.52%
7. Leidos Holdings Inc (LDOS) – 4.42%
8. Rheinmetall AG (RHM.DE) – 4.26%
9. Huntington Ingalls Industries Inc (HII) – 4.78%.

These holdings reflect the ETF’s focus on companies involved in defense technology, with a significant concentration in the aerospace and defense sectors.

SHLD Technical Analysis

This chart analysis is for the GX Defense Tech ETF (SHLD) as of July 19, 2024.

Trend Analysis:
The price has been in an overall upward trend since early February, indicated by the 50-day moving average (blue line) consistently trending higher and remaining above the 200-day moving average (red line). Recently, the price has pulled back from its peak around $35.50 to the current level of $34.07.

Support and Resistance Levels:

• Support: The 50-day moving average at $33.79 is acting as a support level. Below this, the 200-day moving average at $30.36 is another key support level.
• Resistance: The recent peak around $35.50 is the immediate resistance level to watch.

Volume Analysis:
The volume has been relatively low, with occasional spikes, indicating that significant buying or selling pressure is not consistent. Recent trading volume is around 44,700, which is low compared to past spikes.

Relative Strength Index (RSI):
The RSI is at 56.61, indicating that the stock is neither overbought nor oversold. This suggests a neutral momentum with a slight bullish bias.

On-Balance Volume (OBV):
The OBV is relatively flat, showing that the volume flow is not strongly in favor of either buyers or sellers.

Stochastic RSI:
The Stochastic RSI is at 0.539, which suggests that the ETF is in a neutral position but closer to being overbought than oversold.

Chaikin Oscillator:
The Chaikin Oscillator is at 156,279, showing a recent increase in buying pressure, but not at extreme levels.

MACD Oscillator:
The MACD line is at 0.33, slightly above the signal line (orange), indicating a marginally bullish signal. However, the histogram shows a small negative value of -0.00, suggesting that the momentum is weak.

Time-Frame Signals:

• 3 Months: Hold. The ETF is showing a neutral momentum with a slight bullish bias. The RSI and MACD suggest consolidation with potential minor upward movement.
• 6 Months: Buy. The overall trend is upward, and support levels are holding. A rebound from the 50-day moving average could signal further gains.
• 12 Months: Buy. The long-term trend remains positive, with the 200-day moving average rising. The ETF is expected to maintain its upward trajectory.

Past performance is not an indication of future results. This analysis should not be considered as investment advice. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions. 🧡

Looking Ahead

The interception of US bombers by Russian fighter jets over the Barents Sea is a stark reminder of the fragile and volatile nature of international relations between NATO and Russia. The historical context of the 2014 Ukrainian crisis, combined with recent airspace violations and the expansion of NATO, paints a complex picture of global power struggles and military brinkmanship. As NATO continues to extend its reach towards Russia’s borders, incidents like these underscore the urgent need for diplomatic efforts to prevent further escalation and ensure stability in the region.