Contrarians of the World Unite! All You Have to Lose is Respect of Your Peers

We have become rather bullish on Russia in recent weeks, mostly due to the RSX (country ETF) ignoring the persistent weakness in crude oil (recall that Russia is a petro-senitive economy) on top of the seemingly unfavorable political headlines in America. 

Indeed, if we traded squarely off corrections, such as crude oil vis-à-vis Russia, then of course we would have either been sidelined or looking to short "Mother Russia."

But what if the correlations are broken in such a manner which betrays valuable information? This is an often overlooked aspect of markets and often amounts to being a "tell" in a poker game. Another example would be if the U.S. Dollar continues to bounce from oversold conditions, but gold and miners rally anyway, which is what we are seeing this morning. 

Circling back to Russia, though, even though we took partial profits on RSX this morning, an individual Russian ADR like MTL (steel) is now looking to break higher from its recent consolidation in a hot materials sector. 

Simply put, Russia is quietly emerging as one of the winners of summer trading. It will be interesting to see if that carries over into autumn.