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By Mike Paulenoff, www.MPTrader.com
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?
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
