Powered By Blogger

About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Monday, February 27, 2012

Russia Stock Market

Russia remains a high volatility "risk on" favorite. The market remains very attuned to US stocks,
the oil price and to industrial commodities prices. The strength in Russia stocks since late 2011
reflects a global player switch to "risk on" and the the positive trifecta of the SP 500, oil and
industrial basics prices. There is now buzz here in the US that with V. Putin expected to win the
presidency, a key uncertainty will be resolved, making it less risky to invest in Mother Russia.

My take on this one is different as I think putting Putin back at the top of the Kremlin will add to
uncertainty and foster more political antagonism from Russia's growing middle class of better
educated, ambitious and anti - autocratic younger people, especially if Putin and his guys decide
to get nastier with these folks in the post election period. Of course, Putin could turn into St.
Vladimir of Kremlin Square, but the past record offers little support on this point.

The RSX composite does get overbought when that 40 day RSI gets up to or above 60% and
the market has been trading in tandem with the SP 500 and the oil price, both of which are
overbought short term (Go to chart link below for the 40 RSI).

I am avoiding Russia now. You have the market overbought and I await the post election
period to see if Putin reads his antagonists the riot act and whether a growing number of folks
will continue to be on the streets to challenege Putin's new administration. Springtime is just
up the street a little and around the corner.


No comments: