Russell Index Weekly Analysis

The chart continues to deteriorate for the Russell Index. Even with the dollar strengthening last week, the index continued to face heavy selling pressure. It closed the week at 577, which is right above a major support level. We are expecting a bounce in equities next week. This should help the Russell re-gain the 50-day moving average.

The Dubai situation last week led to selling in every asset class except fixed-income. This current price area on the Russell is a good entry point for those wanting to get long the index, with a hard stop on a close below the 575 level. Look for a bounce to the 600 area if the Dubai situation does not worsen this week.

Investors are still in the midst of a bull market (or bear rally?) so pullbacks have been bought with success and it would make no sense to do anything different until the markets change direction.

Disclosure: No position in the Russell Index.

Comments

[yogi bear]

This is certainly a contrarion view point. I'm almost in agreement but want to see what Asia and Europe do in the early morning. They have had plenty of time to analyze this situation. It's really chump change we are talking about.

2009 Nov 29 09:48 AM

[Theodore DeMatties III]

I to feel this isn't a big enough situation to reverse the current course. There is no doubt the "situation" is coming in my opinion, this just isn't the one.

2009 Nov 30 07:43 AM