Country Spotlight: It’s now or never for Russian stocks
It goes without saying there have been significant developments in Russian stocks since our last update on July 11. These developments have placed the Russian RTS Index at a potential make-or-break level. To review our posts on the Russian stock market:
On March 4, we pointed out that the then-collapsing Russian stock market closed at the key 61.8% Fibonacci Retracement level of its 2009-2011 rally (number “1” on the chart). The “golden Fibonacci” level is the most impactful level and often creates the impetus for a turn. Indeed the market did arrest its 3-year decline there and began a bottoming process.
On May 13, we noted the progression of the bottoming process with the short-term potential target at the 61.8% Fibonacci Retracement level of the October-March decline (number “2”).
In the July 11 post, we noted that the RTS Index had surpassed the short-term resistance at #2 and was at the potentially longer-term directional determinant at the 2012-14 down trendline (number “3”). If the index was able overcome the trendline, it was likely that the Russian stock market was entering a longer-term uptrend.
Fast forward to the present and we see that the RTS obviously failed the test at the trendline #3. Whether it was the newly implemented sanctions or perhaps because the White House press secretary’s Russian stock shorts had finally been squeezed out, the RTS has sold off sharply in the past few weeks. It is now at a critical juncture: the 61.8% Fibonacci Retracement level of the March-June rally. The fact that it has retraced that much of its rally is not unusual nor does it invalidate the “bottoming” theory. Major turns retrace to the 61.8% frequently before they return to their previous bounce action — often turning a short-term bounce into a longer-term turn. It serves to shake out the money that’s uncommitted to the long-term bottom thesis.
Will the once-again hated Russian stock market reengage and execute a longer-term turn. Or was the bounce earlier this year just that — a bounce. That determination should be made based on the RTS’ reaction from current prices.
Recommended for You
Last week, Linn Energy (LINE) arranged to swap some assets with ExxonMobil (XOM). On the heels of a positive take from Credit Suisse last week, two more analysts murmuring sweet nothings about the deal tdoay. RBC's John Ragozzino and team note that Linn's "portfolio high-grading strategy" continues…Barrons.com
Business Insider is at the annual Bloomberg Markets Most Influential Summit on Monday, and this year guest after guest has talked about the same worry. Early in the conference Carlyle CEO William Conway, hedge fund legend Julian Robertson, and William Dudley CEO of the Federal Reserve Bank of New…Business Insider
Call it health care law numerology. The Obama administration has had to revise and refine some initial enrollment numbers for health insurance sign-ups after they turned out to be too optimistic. Parsing the numbers is a new pursuit for administration officials from President Barack Obama on down,…Associated Press42 mins ago
Markets are reacting in real time to tension in Ukraine following Russia’s March incursion into Crimea and subsequent annexation of the Black Sea peninsula. The Micex Index fell 1 percent to 1,417.46 at 12:44 p.m. in Moscow, giving a loss since Feb. 28, the day before President Vladimir Putin ’s…Bloomberg
When Tom Greco bought his four-bedroom home three decades ago, he assumed he'd pay off the mortgage before retirement — just as his parents did. Instead, his $4,500 monthly mortgage payments — a consequence of several equity withdraws over the years — became a financial drag. "It's pretty hard to…Los Angeles Times
For nearly a year, EMC and HP have been kicking the tires on a merger that would have created one the biggest enterprise tech companies on the planet — with over $130 billion in annual sales, according to the Wall Street Journal. Both companies were concerned they couldn't sell the deal as it was…Business Insider
US private equity group Blackstone is "giving up on Russia", highlighting how even well-connected western investors are shying away from doing business in the country. The New York-based buyout group has been frustrated in its attempts to find deals in the country since its co-founder Stephen…Financial Times
Alibaba Group Holding Ltd. (BABA)'s initial public offering became the biggest ever at $25 billion, after bankers exercised an option to boost the deal size by 15 percent on strong demand, a person familiar with the matter said. The underwriters exercised a so-called greenshoe option to sell an…Bloomberg
Gold shined brightly at the beginning of 2014, with bullion prices jumping by about 13% from New Year’s Day until mid-March. Last week, the precious metal settled near lows not seen since Christmas 2013.MarketWatch
During the debut weekend of Apple's new iPhone 6 and 6 Plus, Apple sold more than 10 million units of the larger-screen devices, the company said today. You can see from the chart below how Apple has managed to outdo itself on sales of new iPhones on opening weekends ever since the iPhone 3GS first…Bloomberg
Most of us are just in it to bulk up our savings for retirement, make a little extra money on the side, or even just beat inflation (more on that in a minute). ... but your retirement savings are. Retirement savings, on the other hand, are invested if you put them in a retirement fund like an IRA…Business Insider
US stocks were on track for their biggest loss in almost seven weeks Monday as investors worried about signs of weakness in China. Worries about slowing growth in the world's second-largest economy pushed the down the price of oil, weighing on energy stocks. CHINA WORRIES: Investors are nervous…Associated Press
A significant benefit of the Affordable Care Act is the opportunity to receive money-saving tax credits up front to cut the overall cost of health insurance, but now hundreds of thousands of consumers could owe back some of that money next April.Those affected took advance payments of the premium…USA TODAY
An Oklahoma City-based energy company has unveiled a new formation in south-central Oklahoma that the company's CEO said will elevate the state as an oil producer. Continental Resources Inc. said western Oklahoma's Springer Shale deposit is in the heart of the South Central Oklahoma Oil Province,…Associated Press
As the American economy sunk in the wake of the Great Recession, many Americans were forced to rethink their spending habits and tossed their credit cards overboard, reaching instead for the perceived safety of their debit cards. Debit cards protect you from yourself by limiting your spending to…U.S.News & World Report LP
Auxilium Pharmaceuticals Inc. (AUXL) was downgraded to Hold from Buy at Stifel. Genworth Financial Inc. (GNW) was written up in Barron’s over the weekend as having 80% upside potential. Las Vegas Sands Corp. (LVS) was downgraded to Market Perform from Outperform and the price target was cut to a…24/7 Wall St.
Cash-strapped RadioShack Corp. said Monday it has talked with a major vendor about potential changes to its commercial arrangement that could benefit a financial restructuring of the electronics retailer. In a regulatory filing with the Securities and Exchange Commission Monday, RadioShack…MarketWatch
Russian stocks headed for the longest losing streak in two months as AFK Sistema continued a retreat triggered by last week’s arrest of its billionaire owner and OAO Alrosa dropped after the diamond producer’s chief executive officer stepped down. The benchmark Micex Index (INDEXCF) fell 0.5…Bloomberg
Caked with mud and soaked in putrid water, Qazi Mohammad Yahya's ruined handmade carpets and Pashmina shawls reflect Indian Kashmir's economic devastation from the region's worst floods in a century. As the waters recede and the clean up finally begins, business owners, including those selling…AFP