Back to Brazil, China and Hong Kong for Intermediate Term

S&P 500: Back to 800 level of previous consolidation.
Oscillator: Market as overbought as it has been in years.
VIX: Volatility coming down, bullish, but is it sustainable?
FXI: Yes it's China. No it doesn't track Shanghai. I'm long.
EWZ: Brazil ETF heavy in PBR and RIO. I'm long.
EWH: Hong Kong ETF, a powerful thrust off the bottom with the China/Asia theme.
Looking for intermediate-term themes, it's back to China, Asia, and Brazil. I'm neutral on US Markets noting that they're highly overbought (as are my current positions as well!). I'm looking to add to EWZ, FXI, and EWH on an anticipated pullback.

Disclosure: Long EWZ, FXI, EWH.

Comments

[Old Trader:]

Is your position on these economies based purely on the charts/TA, or is there a fundamental/macro case that also appeals to you?

Not to diss TA, but I prefer to start with fundamentals, and then employ TA to determine entries and exits.

Apr 05 09:22 AM

[wise:]

Charts or no charts, no one consistently makes money timing the markets, long term studies show.

Apr 05 09:43 AM

[Dr. O:]

"old trader"--you asked: "Is your position on these economies based purely on the charts/TA, or is there a fundamental/macro case that also appeals to you?"

Both. I've been waiting for the charts to base, and break out to the upside. FXI is still dicey, to be honest. The fundamental/macro case says I have to be in Brazil and China.

"wise"-- you opined: "Charts or no charts, noone consistently makes money timing the markets, long term studies show."

I simply don't believe that. I side stepped both bear markets this decade. I simply went to cash. Now I'm tip-toeing back in. I think many people who trade or invest for a living beat the US market averages. It's harder to do the more money one manages.

Apr 05 10:36 AM

[Mad Hedge F...:]

This is where the smart money is going. The one screaming buy out there now are the emerging markets. The US, Europe, and Japan are now committed to spending trillions of dollars to shock the global economy back to life. This is costing the emerging economies nothing, and gives them a free ride back to prosperity. IT turns out that the smaller economies are financially better off than the big ones, with a decade long export boom blessing them with massive foreign exchange reserves and little debt. China, Russia, India, Brazil, and Turkey will be the big beneficiaries. You can buy the specific ETF’s for these countries, or go with the generic iShares MSCI Emerging Market ETF (EEM), which has already started to outperform US markets in a big way. It’s a once in a century opportunity to buy the highest growth corners of the world’s economy at severely knocked down prices.

Apr 05 01:18 PM

[Alphameister:]

I like both the fundamental and technical arguments for being invested in emerging markets now, China being my favorite. Hard to believe that the best growth market in the world is being priced so cheaply.

Apr 05 06:02 PM

[ChinaPharma...:]

“The 19th century belonged to England, the 20th century belonged to the U.S., and the 21st century belongs to China. Invest accordingly.”

Warren Buffett

And although Mr. Buffett would not invest in CHGY.OB (China Energy), you might want to check out how they went from breaking even in the first 9 months of 2008 to making .09/share in the last quarter alone. Forward PE of 0.5 anyone?

Apr 05 09:48 PM