Yesterday, we posted an extensive piece on the bond market, which has gotten a nice lift of late after threatening a major breakdown. Another market in need of a lift is Latin American equities – Brazil, in particular. Coinciding with the bounce in the U.S. Dollar over the past month, Brazil has had a rough May with the benchmark Bovespa Index down some 10% for the month. Help may be on the way, however, for the battered Bovespa – as we revealed in our Chart Of The Day yesterday on Twitter.
As the chart shows, the index is testing its Up trendline (on a linear scale) stemming from its early 2016 lows and connecting its June 2017 lows.
Will this trendline provide the spark that Brazilian bulls are looking for? A few weeks ago, we presented another potential trendline of support on the S&P Latin America Index (SPLAC). After bouncing off of the line for a few days, the trendline failed and the SPLAC sliced through it to the downside, accelerating its recent decline. And what about the breaking Petrobras (PBR) news? Is that destined to undermine whatever advantageous technical factors were lined up for Brazil? Only time will tell, but the aforementioned trendline may be the key indicator to watch.
In a Premium Post at The Lyons Share, we take a deeper dive into the charts of Brazil, SPLAC and PBR in attempt to answer those questions – and determine the odds of a Brazilian lift nearby.
If you’re interested in the “all-access” version of our charts and research, please check out our new site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!
Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.
This article is brought to you courtesy of Dana Lyons, JLFMI and My401kPro.