I know almost nothing about politics in Brazil. I had heard, however, there was a Presidential election on Sunday (that is, yesterday), and the “Donald Trump of Brazil” was rising in the polls.
Well, he won, and Brazil equities exploded higher this morning. Examining the Fibonacci retracements, I noticed that we were trading near a possible reversal point, so I shorted the symbol EWZ at 39.37 with a stop at 39.50. It’s up about 1.43% as of this moment.
This was definitely a “sell into strength” type moment, because Brazil’s problems are probably bigger than their version of Trump can solve.
Alonger-term view provides even more evidence.
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