Theodore DeMatties III submits:

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.

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