Russell Indexes Reconstitution 2016

This year’s Russell Indexes Reconstitution will take place after the close on June 24, 2016.

Performed annually, reconstitution ensures that the Russell Indexes continue to accurately reflect the current state of equity markets and their market segments, including market capitalization (e.g., large and small cap), sector breakdowns, and style structure. The 2016 schedule is provided below along with a list of methodology enhancements effective as of this year’s reconstitution.

.

Reconstitution 2016 Schedule Rank day

May 27

Preliminary membership lists (including adds and deletes)

June 10

Preliminary reconstitution analysis reports

June 10

Reconstitution adds and deletes appear in daily change file

June 13

Updates to membership lists (including adds and deletes)

June 17 and 24

Reconstitution is final after the close

June 24

.

Because many index funds track the Russell indexes, the Russell reconstitution has a ripple effect that changes the constitution of many index funds and affects investors’ holdings and the prices of many stocks.  Some advanced investors, particularly hedge-fund mangers, try to profit from the impending changes by guessing which stocks will be added, removed or switched to a different index and trading in those stocks.  Russell’s transparent stock-picking methodology makes educated guesses about these changes possible.

Ranking Day is next Friday so keep that in mind since the closing prices on that day determine which companies are in or out based by their total market capitalization.  There is much at stake for the financial pirates–so watch out for the annual games leading up to that benchmark event.

For complete details on how the Russell Indexes are constructed I recommend reading:  Russell Index Construction and Methodology

.

Stops and Targets tracks the entire Russell 3000 index (representing 98% of all investable US equities) and on June 24th at the close will reconfigure the symbols list to match the final Russell 3000 index.

.

.

.

Screen Shot 2016-05-19 at 10.25.59 AM

 

(click image to enlarge)

 

I am still keeping a close eye on the red and green channels on the weekly bar ‘roadmap’ chart above.  This is now week number four of the pullback that began after a stop sweep/reversal above the double top at 2100 pointed out here in real-time.  Today’s early poke under the Stops and Targets short-term primary trend line assures that we now have at least the minimum pullback required to create an eventual higher 4 bar pivot low to pair with the higher pivot high at 2105.25

Professional bears will continue to use the top rail of that red channel as a trailing profit stop for short trades initiated at the 2100 area.  So long as price trades below that channel top bears remain in business for what started out as a counter-trend trade but will revert to a short-term trending trade under 2030.50.  The descending top rail of the bearish channel is presently at the 2071 area.

.

.

Screen Shot 2016-05-19 at 10.15.12 AM

(click image to enlarge)

.

ES 2030.50 is the line in play currently.  If we don’t see a stop sweep/reversal here –then the bottom rail of the dark red channel could be the next downside target.  Otherwise, if we were to get a reversal rally above 2030.50 then the first upside resistance target is the descending red trendline built from connecting the last two short-term weekly pivot highs.  Just above is the big LT/IT channel top rail resistance (shown as dashed red).

So, head’s up right here at 2030.50.  That is our bull/bear line as we await the resolution of the anticipated pullback from the stop sweep above 2100.  Price action is bearish below and reverts to bullish above.  The pros now have everything they need here for a short-term stop sweep/reversal setup and a new minimal higher weekly pivot low–if they choose.  It’s all about 2030.50 today.

…my .02

.

.