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Will the Crimea relief rally last?

After the vote on Sunday, the world now knows that Russia has "annexed" Crimea and that the US and EU will impose sanctions to punish Vladimir Putin and his band of thieves. But, traders have already "discounted" the vote and guess what? The market's not going to collapse.

Early this morning in pre-market trading, we saw futures test lower, with the S&P 500 breaking 1830 and finding support at the 1825 level. After a bit of a churn, we then saw traders take US futures higher as the anxiety that created the weakness last week was a non- event. This morning, we're seeing a rally as traders go bargain hunting ahead of all the macro data due out. Expect that we will see a test of 1860-ish before we hit some resistance as we move through the week.

(Read more: President Obama imposes sanctions over Ukraine)

Traders work the floor of the New York Stock Exchange after the opening bell on March 14, 2014 in New York City.
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Traders work the floor of the New York Stock Exchange after the opening bell on March 14, 2014 in New York City.

Barring a major escalation of violence in the region, the prospect of major market volatility and disruption is small as investors have had plenty of time to re-allocate if they felt they needed to. Look, unless Russia begins to move into Ukraine or turns up the heat, it's not much of an event for markets. (That is, of course, unless some development in the region disrupts the flow of oil or gas to Europe or affects some macro-economic trend that threatens the recovery. )

Gold, often viewed as a safe-haven investment during times of instability, was up 3.5 percent last week alone, closing at $1384 an ounce. Some of it was fear driven and some of it was technical. Look at the chart: Gold is about to experience a "golden cross," where the 50-day moving average is about to break up and through it's 200-day moving average, a technical indicator of strength that could potentially take gold to its August 2013 high of $1416 an ounce.

(Read the live blog: Latest developments in Crimea crisis)

Then, there's China. I think a lot of the negative news about China's slowdown has been overblown and, in fact, a slowing, more stable, consistent China might actually better for the them and for the world economy. The next couple of data points will tell. Even the Chinese market last week tested support at 2000, bounced and closed the week out above.

I expect all of the economic reports this week — including Empire State manufacturing, industrial production, capacity utilization, CPI, housing starts, building permits will be stronger. On Wednesday, we will hear from the Federal Reserve and expect a further tightening of policy following their two-day meeting (this has been well circulated, no surprise here) as they continue tapering the stimulus. By doing so, the Fed will be delivering the message that the broader macro data points continue to move in the right direction.

Bottom line: Good news will be good news — and the market will respond accordingly.

(Read more: Think US natgas can threaten Russia? Think again)

—By Kenny Polcari

Kenny Polcari is director of NYSE floor operations at O'Neil Securities and a CNBC contributor, often appearing on "Power Lunch." Follow Kenny on Twitter @kennypolcari and visit him at kennypolcari.com.

(Read more: What's the market doing now? Click here)

Disclosure: The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O'Neil Securities or its affiliates.