Brazils' Stock Market Bubble Has Burst
Stock-Markets / Brazil Jul 24, 2008 - 01:27 PM GMTBy: Mike_Paulenoff
Since its July 15 low, the iShares Brazil ETF (AMEX: EWZ) was up 2.5% through yesterday's close whereas the SPY was up 6.7%. In addition, the pattern carved out by the EWZ has taken the shape of a bearish coil, which warns me to expect another bout of weakness.
The fact that the coil has developed under both the 200 DMA and below the one-year support line is an ominous sign indeed, and suggests that the EWZ is heading for 75.00-74.00 next -- likely on the way to 71.00-70.00. Why? Brazil is heavily associated with the global commodity complex. Easy come, easy go, right?
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By Mike Paulenoff
Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction
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