9/20/16: RSX Technical Details
RSX continues to show that it may be setting up for a sustained reversal ... potentially into the end of the year.
9/20/16: Downside Leader
It appears that the RSX is one of the downside leaders. Today’s price action confirmed the right side channel line (adjusted slightly from previous update).
This upward thrust to the contact point was on the lowest volume in two years. There’s not much commitment (from the bulls) at these levels.
9/19/16: RSX Right Side
The bullish story on RSX at this link may have helped the professionals establish the right side of the trading channel at little cost to them.
Knee-jerk buying with an ‘oil rally’ story to boot, resulted in enough buy orders in RSX, to nail down the right side of the trend-line.
Of course, it’s all conjecture … however, no matter the narrative, RSX looks to be setting up for what may be a sustained decline.
We took advantage of the temporary blip in price and increased the short position via RUSS. If RSX manages to resurrect itself and the trade fails, today’s action has served to clearly define the stop level.
9/16/16: Russian Reversal
Rebound to only 23.6%, of the Russian bear market from 2011-to-present, was labored and choppy; taking about nine months to complete.
A move that small (and subsequent reversal) is not only rare in the markets, but indicates major weakness. If RSX continues lower, it may turn into a swift and severe downdraft.
With the dollar continuing its advance and world oil prices remaining pressured, it may be a double whammy for the Russians and RSX. Also, one should expect (and be warned) that if we get a severe decline in this market, international tensions may go stratospheric.
Note: RUSS is the leveraged inverse fund of RSX. We are currently (as of 12:41 p.m. EST) long RUSS. Details here.
It is not looking good for the RSX.
It has spent nearly two years (20 months) establishing what appears to be a massive down-channel; complete with center line.
The outside-up weekly bar corresponds with a rally in oil.
The RSX appears to be forming a terminating wedge with an upside target (if there is a breakout) in the 21 - 22 area.
While the trade set-up identified in the daily chart below (7/12/15, update) was viable and profitable, it proved to be short lived.
Looking at the monthly chart, we see that the RSX may now be ready to continue lower.
Since about 40% of the RSX is weighted on the energy side, another leg down in the oil market would correspond to the RSX testing lower levels.
Update: 7/12/15, 4:32 p.m. EST.
RSX-2015-003 Trade Ticket released: Market-Action
Those with password access were aware that a position in the RUSL was initiated at the point indicated on the RSX chart.
Potentially more important, was that the trade was executed in the after-hours session.
The spread on the RSX and the RUSL remains tight even in the pre-market and after-hours.
It is obvious now that we have a spring condition.
As always, there may be a subsequent test or even a failure.
That (failure) scenario may be unlikely as the weak-hands have been washed out.
Additional detail including a projection of trade potential (scheduled for release 7/12/15) are in Market-Action
After-Hours Update: 7/8/15:
RUSL position had a tight stop that was hit. Additional action was initiated on this trade in the after-hours session.
More detail in Market-Action
As a result of the gap-lower open in the RSX, special action has been initiated. Details in Market-Action (Russian section)
As documented in the prior update, today's penetration and reversal was forecast nearly two weeks ahead of time.
There was ample time for trade preparation and continued research.
During the session just ended, RSX continued its penetration of support that was started during the previous session.
The two trade entries straddled the low of today's session by approximately 15-minutes each. Averaging of the trade entries put them at approximately 0.10 from the low.
A small but important note is that consulting the financial media as to the "why" of the multi-week down move in the RSX (and the penetration of support) was not part of the research.
A more detailed explanation of the trade set-up is scheduled to be released by 7/12/15. As always, anything can happen and the trade could fail. Details on trade set-up and stop location(s) are in Market-Action.
Initiated position in the Russian market: Details in Market Action
Continuing to monitor RSX for a potential trade set-up.
The index may be working its way into a potential danger point that is currently scheduled to occur during the second week of July.
Our Russian market strategy is modeled specifically for 'crash' conditions. Trading in this market is active and has been in place since March of this year.
There have been a series of trades in this sector that have netted the following gains (with no losses):
Trade Ticket number RSX-2015-001, has been generated for the next trading opportunity. This research report is located in the Market-Action section of this site.