Technically, the RSX Russia index completed a huge, 5 year long cup & handle formation. The handle of this pattern has a smaller cup & handle formation.
Both just broke out to the upside and this week held a perfect backtest. A long position can be taken with a stop under this week's lows.
We don't hear much about Russia. We hear of massive problems in the EU (brexit, German recession, negative rates, Lagarde), US (trade war, "Not QE", debt monetization) and China ( captial controls, trade war, troubled banks).
Thus I think Russia can run based on:
- Capital flight out of the rest of the world with their problems.
- They just cut interest rates from 7% to 6.5%. They have a long way to go! They could be at the start of a very big easing cycle.
- Dollar weakening on a sustained basis in response to "Not QE" and monetization of the massive US fiscal deficit.
- Hedgeye data outlook is positive for Russia.
Both just broke out to the upside and this week held a perfect backtest. A long position can be taken with a stop under this week's lows.
We don't hear much about Russia. We hear of massive problems in the EU (brexit, German recession, negative rates, Lagarde), US (trade war, "Not QE", debt monetization) and China ( captial controls, trade war, troubled banks).
Thus I think Russia can run based on:
- Capital flight out of the rest of the world with their problems.
- They just cut interest rates from 7% to 6.5%. They have a long way to go! They could be at the start of a very big easing cycle.
- Dollar weakening on a sustained basis in response to "Not QE" and monetization of the massive US fiscal deficit.
- Hedgeye data outlook is positive for Russia.
Trade active:
Buying the dip here in RSX as originally planned.
I would use the 24 level as a stop, but I might just sit on it and collect the nice dividends, as long as the fundamental data is good.
I would use the 24 level as a stop, but I might just sit on it and collect the nice dividends, as long as the fundamental data is good.