24 thoughts on “ALERT: RSX Monthly Trade Triangle Buy Signal

  1. This news from "Prime Time Russia" headlines the following story. Since RSX has a high energy component, this should add more fuel to the rally.....!

    Coldest winter in 1,000 years on its way
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    Published 04 October, 2010, 22:20

    Edited 06 October, 2010, 08:46

    After the record heat wave this summer, Russia's weather seems to have acquired a taste for the extreme.
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    Forecasters say this winter could be the coldest Europe has seen in the last 1,000 years.

    The change is reportedly connected with the speed of the Gulf Stream, which has shrunk in half in just the last couple of years. Polish scientists say that it means the stream will not be able to compensate for the cold from the Arctic winds. According to them, when the stream is completely stopped, a new Ice Age will begin in Europe.

    Read more

    So far, the results have been lower temperatures: for example, in Central Russia, they are a couple of degrees below the norm.

    “Although the forecast for the next month is only 70 percent accurate, I find the cold winter scenario quite likely,” Vadim Zavodchenkov, a leading specialist at the Fobos weather center, told RT. “We will be able to judge with more certainty come November. As for last summer's heat, the statistical models that meteorologists use to draw up long-term forecasts aren't able to predict an anomaly like that.”

    In order to meet the harsh winter head on, Moscow authorities are drawing up measures to help Muscovites survive the extreme cold.

    Most of all, the government is concerned with homeless people who risk freezing to death if the forecast of the meteorologists come true. Social services and police are being ordered to take the situation under control even if they have to force the homeless to take help.

    Moscow authorities have also started checking air conditioning systems in all socially important buildings. All the conditioners are being carefully cleaned from the remains of summer smog.

    http://rt.com/prime-time/2010-10-04/coldest-winter-emergency-measures.html

    1. James,

      Not sure if we are there yet. Just remember that they don't ring a bell at the top or the bottom of any market.

      Adam

  2. Dear Adam:

    Thanks for your comments about RSI. It's breathtaking how long a stock can stay overbought. Waiting for a pullback to buy is a miserable way to invest. And talk about gaps! I see charts with gaps piled on gaps like boulders on Mt. Pelion. As you point out, gaps can go unfilled for months. I do like the RSI- I like it a lot. But if I could use only one indicator I'd say my favorite is the MACD. And if even that were taken away, before any indicator, I want to see the moving averages- there's nothing more lovely than the 5, 20 and 50 MAs fanning apart and climbing one above the other up up and up.

  3. Hi Adam,

    I am wondering about the trade triangle.
    When exactly within the month should I look at a "Monthly" triangle?
    In the first or second week, or only at the start of the 3rd week?

    Same for weekly triangle. When "exactly" should I look at it?
    On the Monday, or only on Friday morning? Or any other day?

    Thanks for any precision with this tool.

    Peter

    1. Peter,

      The Triangles, daily, weekly and monthly are dynamic and can appear at any time. Best to look for them every day. We will be coming out with portfolio updates showing the actual buy and sell points based on out Trade TriangleTechnology.

      All the best,
      Adam

  4. Agreed Adam. The pullback I am expecting does not respond to any gap filling. In fact this ETF shows numerous unfilled gaps. I was referring to a regular correction since it's rallied pretty strongly nonstop ever since the APEX broke... and ... nothing.

    RSX, in my opinion has some room to go up as you see in the chart linked below:

    http://screencast.com/t/MjIzZmQ3N2I

    EWZ, conversely seems to have reached a resistance area. So If EWZ bounces off as resistance holds, we might witness RSX correct and fill that gap. Please watch the EWZ chart below

    http://screencast.com/t/MDRiNTBkZG

  5. I also respect gaps Bob. Howeverm this kind of security shows many of them. Then I turn to the weekly charts. July 2009 there was an unfilled gap in RSX.

    http://screencast.com/t/MTJhZGE2MjEt

    Also I think it is following EWZ, which is also rallying whereas I was expecting a correction pullback to get in. But so far no news about that correction. It would be good to get that correction, so your unwanted gap would fill and give a nice entry spot.

    Have a god one !

    1. Alex,

      The one thing I've learned about gaps over the years is better to go with the breakout rather than waiting for a pullback to fill a gap. Sometimes gaps are filled months and months after the fact and technicians will say ''Oh, its filling the gap.''

      Over the years I have learned my lesson about waiting for pullbacks and missing big moves. I believe traders are much better off going with the trend rather than waiting for a potential pullback that may never happen.

      All the best,
      Adam

  6. Can anyine tell me what is the expected median and high target of RSX. how this index compares to taking a position at EWZ current price. what would be a better bit RSX or EWZ.

    Thanks.

  7. That gap you spoke of is pretty large. Take a look at previous gaps, i.e. Dec.'09. Did some announcement / news cause this?

  8. Interesting comment by Bob K. You might want to take a look at a comparison of RSX with Rio Tinto. As can be seen on this chart both move the same. However, RTP is right smack on a triple top.

  9. Say what Bob K real traders don`t rely on RSI!! Overbought on an osillator sometimes means buy for breakout traders

  10. It's been rising on declining volume in recent weeks. Can't see this as a positive sign and reason to buy.

    1. Norm w,

      This is an ETF that tracks Russia which is mineral rich (think commodities oil/gold). The lower volume is not as important in a market that is tracking another market in my opinion. If this was just a single stock then that would be another matter.

      All the best and thanks for your feedback.

      Adam

    1. Mike,

      Perfect question.

      You can find it on the blog by using the search box. We are also working on a special site for MarketClub members to track this portfolio. When it is finished look there for stops positions and a whole breakdown of MarketClub's Global Strategy Portfolio.

      All the best.
      Adam

  11. Bob, my RSI shows 67.64 with 70 being the pinnacle. Are you saying it could run up to and past before being overbought? I would be more inclined to agree with the pullback scenario. I agree with the gap analogy and am more amped about EWZ.
    Cheers.

    1. Dimitri,

      Just a quick word on the RSI. I remember when this indicator first came out which was in the 70s I believe. Traders got very excited thinking that once it hits 70 they could sell the market. I have seen so much money lost on this indicator because it has not been used correctly. A stock or futures market can stay above 70 for quite some time before it reverses. What I have found to be very useful with the RSI indicator is when you can see negative and positive divergences. What that means is when the market is making new highs but the RSI is not and then turns down that would be a negative divergence.

      Just wanted to pop in and give you my viewpoints on this indicator.

      All the best,
      Adam

  12. Great Scott! An emerging market nation index that's not signaling overbought (see any Day Chart RSI for just about every country ETF). RSX is at $33.31 and faces some resistance at 34 and then it's clear sailing-- but I'm not confident about the gap below it.

    What's the saying go that price rising on gap(s) is building on sand?

    So maybe there will be a pullback for the penny pinchers and that three day patch of declining volume may be the opportunity for those of us who never leave the starting gate when the bell goes off.

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