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I see there was a discussion on Larry Kudlow’s show on CNBC last night about whether Russia had completely rejected democracy and reverted back to the days of Stalin. While it is a fascinating discussion to have, given all of  current leader godfather Vladimir Putin’s thinly veiled KGB style of running a government and country, looking at the performance of the Russian broad market ETF below shows the weakness compared to America. As an example, the Russian market is currently back to its 2010 lows, while we know that the S&P 500 has not come close to its respective lows from last summer. Note also that the $26 level on the RSX also served as initial tough resistance off of the major rally after 2009 bear market bottom.

Indeed, Russia may very well be regressing back into an era of Joseph Stalin-like tyranny. I suspect that the market will tell us that is the case with a break below this key level in the coming weeks. Either way, watch it closely, as you can see how important that price area is, and how much air below there is to drop. Note also that Russian steelmaker MTL has been horrendous (along with other steels, to be fair). The triple-long levered country ETF, RUSL, has seen plenty of carnage as well.

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