[RUSL] update

There are a couple of old investing (gambling) sayings that apply to right now with RUSL:  First, don't catch the falling knife.  Second, buy while there is blood in the streets.  If you are not careful about following rule 1 then the blood mentioned in rule 2 will be your own.  This is where EW is your major friend.  Just Friday, Mish said he liked Russian stocks only to have the bottom fall out again today.  Mish is a smart guy and I think he is right about Russia being near a bottom but "near" can be a lot of money with the kind of volatility we are seeing not only in leveraged ETFs but in junior markets in general.  Still, he never talks about the stock price charts when in fact that is all that really matters.  Anyone listening too carefully to him in real time would have caught the falling knife.

Fortunately, I keep my own charts and I bailed on RUSL near the top pre 6:1 reverse split.  From this post I offered the chart below whose mode indicated wave 5 down should begin soon and in this post I cautioned to only buy in the "significant dip".



Today RUSL tanked up to 26% at one point and closed more that 23% down.  So the question is whether or not this qualifies for the term "significant dip".  I think it is time to present the big picture on RUSL which you see in the chart below.  The fact that you cannot read all the labels at this zoom level is not important for now.  What is important is the green 3, 4 and speculative 5 labels.  I know it sounds like a lot to hope for but these shares have been falling hard for a long time now and after 5 waves down you are going to get a large 3 wave retracement.  Green 4 @~$200 is the the primary target for that bounce.  When Russia gets a break from the pounding (and it will....), lots of money is going to be made on the bounce as shorts cover en masse.

Below is the zoom in.  That 5th wave could require a trip to the top channel before playing out (red model) or we could get a small bounce tomorrow and then wave 3 of 5 down later in the week.  Either way this could end up back down at $8 in short order because blue 2 was a complex sideways wave and therefore wave 4 should be a fast and furious vee type wave.

Zooming in more, I suspect that the top rail will be hit for blue 4 before the final collapse into wave 5.  If this is true then the current wave should bottom very soon or even already.

Zooming in again, I model the chart needing small waves 3, 4 and 5 to play out down to the 61.8% fib.  Then I have to suspect this is a buy but use 5% stops just in case.  Anything significantly lower than the 61.8 retracement has to make me wonder if this is just going to finish green 5 down right now.  Target for green 5 should be around $8 at which it becomes a super strong buy for a huge short covering ride.