A major shock broke out over the weekend—the US directly closed Venezuelan airspace, and negotiations with Maduro's side have completely collapsed.

So what’s gathering in the Caribbean now? Aircraft carriers, strategic bombers, and roughly 15,000 troops deployed. How big of a show of force is this? You’d have to go back to the US invasion of Panama in 1989—this is the largest display of US military power in Latin America in over thirty years. Venezuela isn’t backing down either; the whole country has entered a state of combat readiness and started military exercises.

But if you analyze it calmly, a real ground invasion? I don’t think so. The troop numbers aren’t really sufficient, Venezuela’s own defense systems aren’t weak, and there’s already a lot of anti-war sentiment within the US. Frankly, this looks more like a certain president’s "muscle show"—just posturing to intimidate.

That said, the capital markets will definitely react in the short term. As risk-aversion sentiment rises, friends trading contracts should be careful and not make impulsive moves. By the way, remember to watch out for Powell’s speech at 9 a.m. tomorrow—there could be new signals.