Perspective: We believe that there is a chance for temporary strengthening of the dollar
No expensive oil, nor Mounting ruble were not able to bring Russia's stock indexes to new heights. You can certainly try to justify the market effect of fatigue on Friday, but the reasons, apparently, in the other.
First of all, the money in the market was simply less. After a record trading volume on Tuesday, the MICEX index steadily decreased. Secondly, in the actions of the second echelon trend slowing growth, indicating a weakening of the cross-flow of funds from the sector blue chips. Third, increasing technical risks correction. The Friday sale - proof of this. Carrying weekly price on the MICEX index over the past week increased from 1260 to 1316 P. Today, this level acts as a stop signal for the short sale. If the index goes below 1316 on, this will cause the fixation of short positions. The next level of support - carrying 20-day price (IAD-20) - located at 1268 n. However, most likely, and it will be performed in the very near future. First stop we look forward to ~ 1240.
The situation on foreign markets is also changing for the worse. We see a few external threats that could drastically affect the market prospects. The main uncertainty is associated with the instability of the U.S. dollar. There is a high probability that the first time the level of 1.50 in a pair of euro /dollar is not passed, the consequence may be a temporary strengthening of the dollar.
The second source of risk - more costly oil. The main reason for rise in oil prices caused mainly by speculative actions of participants. Model indicator net of trading positions in futures wti (OBV-20 in Figure 1) is currently in the negative zone, which means a dominance in the market of short positions. Model calculations show that short positions can be fixed within the next 1-2 days. Technically the price of light oil could rise further to $ 78,5-79. On Monday morning is marked by a maximum of $ 79.05. But after that could be followed by a sharp setback.
And, finally, the last - the reaction of investors to the published reports of U.S. companies on Friday demonstrates the persistent desire to take profits on the fact. The index of the financial sector in the U.S. fell on Friday on 3,2%, including BAC shares crashed to 4.6%, City - on 3,4%, GS and JPM - on 2,3%. The selling also noted in the actions IBM (-5%), GE (-4,2%), Intel (-2,4%). Investors questioned the sustainability of continued growth.
The defining moment of truth we can become the beginning of the week. Fixation on the growing market we saw last week. Next step - fixation on the incident.
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