I’ll be blunt. I think there are better places to invest right now than passively managed US index funds. See my previous post here for some of those reasons – http://livetrades.tv/its-a-great-big-world/. One area that has my attention lately is Central and South America.
Here is the iShares Latin America 40 ETF (ILF). This recently broke out nicely on an absolute basis and relative to the S&P 500 (see bottom of chart). In my opinion, this looks like a good ETF to own above the yellow box and I do own it. This ETF is dominated by Brazilian and Mexican companies which make up about 75% of its total weight.
So let’s look at some others outside of Brazil and Mexico. Here’s one I’m currently waiting on. This is the iShares MSCI All Peru Capped ETF (EPU). This is the monthly chart below looking like it wants to break out of an inverse head and shoulders pattern. If it can close and stay above this 37 level I’ll be a buyer.
Here’s another one I like and that I currently own a small position in. It’s the Global X MSCI Columbia ETF (GXG). It’s been in an uptrend since the beginning of 2016 and has really been tightening lately. As shown in yellow this area in yellow has acted as support and resistance in the past. If it moves over this level, I’ll add to my current position. Below 9.50 area I’m out so I like the risk / reward here.
Then there’s Brazil. I’ve been following this monthly chart very closely for a few months now. It is the iShares MSCI Brazil Capped ETF (EWZ). You can see how this downtrend line from 2010 has acted as resistance. Now it looks like it’s on its way to breaking above it. Additionally, this area near 40 (yellow box) has acted as support and resistance in the past and its getting really close to breaking above it. One thing I really like about this chart is the shallow dip it took when it hit the downtrend line earlier this year. This can be a sign buyers are getting anxious and there is strong demand that can lead to an eventual breakout.
I’m not quite ready to establish a full, or any, position in EWZ quite yet. If we zoom in and look at the daily chart you can see we are right at an area that as acted as resistance the last two times price touched.
As such, ill wait until we break and hold this level just above the current price. If it doesn’t happen anytime soon, I’ll just look elsewhere and stay open minded. However, when it comes to my more passively managed / slower money accounts I continue to look outside out the US.