Barbarians are inside the gates - and that's a huge challenge as you know. It impacts society in many ways; and that includes markets. It's also challenges a somewhat already conflicted European Union; especially the Shenzhen area of 'free travel' in Europe. In my view that is effectively suspended without any overall agreement, simply by virtue of France closing its borders. 

As you know it's necessary to cross French borders to travel between the core nations of the EU; Spain to Germany; Holland and Belgium to Spain, even Italy unless traversing mountain roads in Switzerland. As I drove from near Spain (Jean San Sebastian, a beautiful seaside town) back to a family chateau near Bordeaux in August (on E-5, the Spanish/Franco version of I-95); I noticed license plates from virtually every country in Europe, including the Balkans, the Baltic states; even Russia. Border checks there and comparable roads North and East of Paris, effectively ends free 'core Europe' no-border-check travel.

I believe the open (compassionate but less smart) arms policies championed by Germany (now quickly backing-off) are well-intended humanitarianism, but really opened the door to 'Trojan Horse' attacks; of which I'm sadly convinced Paris on Friday night was just one (that's clear given the cache of weapons seized in Paris and Brussels in police raids Monday, including even an RPG). The fact that the perpetrators mostly came through Belgium, as did the Thalys terrorist from the same 'network' shows the mess Brussels has allowed for the arms trade as well as a safe haven for terrorists. Home of NATO; pressure to clear-out a lot of the spurious types is going to be hard to resist.   

Border controls and mobilization will cost money; probably stimulate Draghi's call for more funding, and perhaps that is part of what the market liked Mondaytoo. It's sad for 'legitimate' refugees, but most cannot be adequately vetted, so officials claiming to do just speak politically-based nonsense wishful thinking, in-absence of any 'security databas'e to check for people who never traveled much before and so are unknown to databases, even in their home countries sometimes. It's a risk many US Governors made clear today as well.

The stock market? Old saying: 'buy on cannon fire; sell on victory trumpets'. In this case be cautious as likely a classic 'short-squeeze' trap turned around as well by China's currency being added to the IMF basket. Economically nothing has changed; and might even be worsened in time by this. It's not simply what they argue as 'deferred consumption'. That's why they always say of weather related retail shortfalls; but terrorism and changing lifestyles requiring security of all types really isn't a 'deferral' of consumption. Ask most retailers how stuff was moving before Friday's attack; and the answer is not well. We showed the 'inventory bloat', and nothing whatsoever has changed. 

Daily action - the market's stamina was 'not as great' as it appeared; but was sustained through most of the session. Yours truly had no guidelines for a late day increase, because we were flat other than a partial retention; and I was at the dentist for quite some time (sorry; but there are personal matters at times). 

Oil shot up a bit; which is something I expected; because a key story was that, at last, USAF Thunderbolts (A-10 Warthogs is the affectionate name for slower effective ground-support aircraft that the big spenders at the Pentagon want to retire but some stay around and funny, they are always needed and do the job great). and AC-130's (C-130 fitted with 'artillery' and a Gatling gun basically) hit a motor-pool of trucks that ISIS uses to run black-market oil to sell in Turkey. It might be appropriate to ask Turkey why they allow this, or why we haven't hit it sooner. Perhaps it's because both Russia and France have now hit ISIS oil as well as supply storage facilities; again begging the question of why we're fairly delicate in our targeting. 

We won't be now, because Hollande was clever today: instead of proposing to invoke Article 5 of the NATO Treaty; he rather called for a 'Grand Coalition' of France, Great Britain,The United States and Russia, to eviscerate ISIS. Russia is more likely to participate that way; by leaving the name 'NATO' out of it. Also today there was a story that few if any noticed: Russia agreed to 'renegotiate' terms of the debt owed them by Ukraine. That's perhaps a hint of lessening, at least for now, pressures on Kiev, since it's clear the major problem is ISIS.

Finally; I am astounded at certain politicians who won't use the term even now to define our enemy as: 'Radical Islamic Extremism', or Islamism. That's not 'Islamaphobia', it's a recognition that fundamental Islam is a breeding ground of extremist recruiting, and this goes beyond ISIS. Most other sects or tribes in Sunni Islam that ascribe to Saudi-promoted Wahhabi Islam are fundamentalist and thus potentially dangerously intolerant of others (such as women, and any other religion than their own). That is the perverted Islam; and if not for oil; I'm thinking more Americans would call a spade a shovel in this case. Not doing it is creating the false presumption that defeating ISIS (which must occur) would somehow end the risks. Yes, part of it. But we've actually supplied groups that are sympathetic to ISIS; or might be if they ever took Damascus. 

Our leader is not willing to call it fundamentalism Islamic Extremism, because that would require telling the truth about the threat, which most people already know. So it becomes another version of soft-pedaling threats to the American people. If anything, they still allow questionable organizations to maintain non-profit 'as if they were charitable' status in this Country, like CAIR (some believe it helps a slew of small convenience store and others to gather money to fund terrorists sympathizing groups, or fund 'reach-out' programs in prisons, which are fertile ground for recruiting converts to Islam, and then try to radicalize them). 

Sorry to discuss this; but I'm still anesthetized from the dentist and really less has changed in the market than many think. So far it's a rally back toward the most recent breakdown point (that would be the mid 2050's basis Dec. S&P or so); and then we'll see.