Bovespa (Brazil Index) – technical outlook

The weekly chart of the Bovespa is trading parallel to the crude oil chart in magnitude and speed, although most stocks are not about oil – but Brazil is very much correlated to the CRB development and we are in an undiscriminating crash mode, where basically everything gets dropped like a hot potato. Last week was an inside week and we closed again below the weekly Bollingers after having the snap back rally as well, which is a very bearish momentum still. This chart confirms our overall bearish observation that a final and volatile downleg is in the making with even more capitulation ahead. The chart suggests here as well 3 weaker weekly closes at least. Basically, I would have assumed that 35000 support should hold but a test of the 30000 area looks inevitable.

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~ by behindthematrix on October 19, 2008.

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