Our message to newsletter readers in July was to watch for an inflection and possible reversal in two international ETFs. That plan appears to be working so far, and one of the funds might already have begun forming a bearish impulse.
EWZ is in the resistance zone
Is it time for the reversal?
What comes next after that 3-wave move?
There should be a trade soon
By request, here is a look at the ETF that covers Brazilian equity. Looking at the weekly chart below, you will see that I am calling the move from the 2008 high to the early 2016 low a completed three wave corrective structure. Up from the 2016 low, I think you can call that an impulse up for [i] or [a]. The current swing down this year should only be the first move down in a three wave formation for [ii] or [b]. Prices have bounced from a Gann related support at 31.37 though I favor a test of that low or a new low before the impulse is complete. The idea of a new low in (a) is alive as long a the bounce stays under Fib resists at 35.16 and 37.62.