Russia — Revisited


Back on 12/16 we discussed the Russia ETF. What piqued our interest was that the RSX printed over 8 times its normal volume that day. The RSX appeared to be in a free fall, as depicted below with a chart from 12/16/14.

rsx daily

Russia delivered a surprise by raising its interest rates from 10.5 % to 17 % to shore up the ruble and defuse the currency crisis threatening its stricken economy. That surprise move put a floor in the RSX allowing it to rebound. So let’s take a look at its progress.

rsx daily

The RSX has since completed 3 daily cycles and is currently on its fourth daily cycle. At 17 days, the RSX seems to have locked in a right translated expectation to this daily cycle. The RSX is fast approaching the declining 200 day MA. With a daily cycle low due over the next two weeks, the 200 MA may be too much resistance at this point in the daily cycle. Perhaps after a false break out, the RSX will roll over into a daily cycle decline.

rsx weekly

The RSX formed a weekly swing low as it rallied out of the 12/16 low. It also broke above the declining weekly trend line to confirm the new intermediate cycle. Now at week 16, the RSX is close to entering its timing band to seek out a intermediate cycle low. Allowing for the completion of the current daily cycle would take the RSX out to week 18.

Since the current daily cycle will likely form as a right translated cycle, the RSX will probably need to print one more daily cycle that forms as a left translated cycle that fails, which will lead to its intermediate cycle decline.


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