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October 12, 2005

A tough day for Mother Russia, Wed., Oct. 12, 2005, 7:50 PM

The ADVFN data service now carries trading data for numerous international stock exchanges, and the list is growing. So users in North America get the opportunity to track the performance of some of the ADRs they might be trading locally (in the U.S.) with the trading of the Company-listed shares in its domestic market.

Russia today, among many international markets, ran into some tough sledding. It's good to know that traders who are long stocks in Japan, India, Russia, Brazil, etc are performing just as poorly (or well, if that's the case) as those in Canada and the U.S.

It's also a good idea to run a chart of the index against a diversified group of high-volume traders on the exchange. If you are actively trading markets, understanding beta is important, and it's comforting to know that your stocks are behaving normally. In fact, if they are not, it pays to try to understand why.

The chart below shows the points of broad market strength and weakness for the Russia Trading System (RTS).

The chart below that shows a selection of high-volume stocks on the RTS. I selected Severstal because I happened to be looking at international steel companies, which were struggling a bit through August. But Severstal (RTS: CHMF) turned north the same day in early September as the rest of the crowd.

All these Russian stocks turned down, then up, then down again today, in sync with the RTS Index. So today may have been a tough day for Mother Russia, but the equity market was in sync domestically and internationally.

One final point, I have these little markers that tell me where the broad markets are likely headed. One is RTS. Another is my old GNSS on Nasdaq. I have maybe a dozen securities or indexes that I like to dance with. ;-)

Kind of sets the mood. Will it be waltz, tango, ballet, tap...?

Nyet...Barynya!

Posted by Posted by Bill Cara on October 12, 2005 07:50:35 PM | Category: Russia