[RUSL] update

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Regardless of the potential for more near term turbulence, I see RSX/RUSL quite near significant bottoms.  I see commodity prices near a major bottom and Russian stocks are essentially a commodities play.  But what really flushed Russian stocks was when Russia got globally sanctioned for Crimea.

Of course, the Russian people have had to put up with so many economic hardships over the years that they just drink another bottle of vodka, curse the government and go on with their lives.  It has made them a resilient people indeed.  Can you imagine the Hell that would break out in the US if our currency got creamed like the Ruble has?  My point is that sanctions have not collapsed Putin like they were supposed to have.   Remember, the goal of sanctions is to hurt the people so badly that they call for leadership change.  The hope by the sanctioners is that innocent people will die of starvation in the streets thus making big global headlines and turning the people against their leaders.  But Putin is the Russian bear incarnate.  If anything, his popularity has only increased.  This chart is dated but it covers the time period when sanctions were begun. Blue is approve, red is disapprove.


Apparently, the Russian people are not buying into western bully tactics on this one.  Maybe its because most in Crimea identified with being Russian anyhow.

In any case, more recent polls indicate 89% approval rating for Putin despite the economic hardship that sanctions have had on the Russian people.  89% !!  That is the Russian people saying in unison "отвяжись" to western elite.

Well, when something is a cost to you to implement such that it is hurting your own people, and when that cost has no return on the political investment, even the stupidest of politicians will eventually figure it out.  And so the French are beginning to publicly break ranks with the rest of the good old liar's club of the west by saying that perhaps sanctions are hurting France more than Russia.  OK, OK, he used different words and pointed to momentary progress of ceasefire in Ukraine, but anyone with a brain knows that China slowed first and next will be The Euroscam and finally the con men sitting at the top of the pyramid scheme here in the US will feel it.  I'm sure that French economists are already seeing bad numbers show up which is the real impetus for make nice with Russia.  After all, Russia has the commodities that everyone needs and high prices due to embargo induced supply constraints can get a politician dragged into the streets and hanged if it gets bad enough.

I would not be surprised to see RSX/RUSL go down one more time to put in a hard double bottom in the low 10s but the model suggests that a significant bullish move will begin soon.  If this happens, expect the embargo lifting news to be credited for the move even though the charts indicated that it was likely to happen before the recent French disconnection occurred.