Short-Term Elliott Wave Structure

Published 7th March 2018

The Bovsepa shows a potentially terminal Elliott wave pattern to the upside. Moreover, we record decreasing momentum on the last swing to the upside. Last but not least, the drop from the February high looks like a small impulse. Brazilian equities are probably near a cyclical top. This will occur either with another spike into a new high or happened already in mid-February 2018.

We turn neutral on the Bovespa at this stage.

Medium Term Trend

Published on the 25th January 2018

The Bovespa is currently tracing out minor wave 1 on its path to the upside.

The 72,700-73,900 area is highlighted in a horizontal blue transparent rectangle. It is of major long-term importance. It has been on a couple of instances a major resistance to the market’s path to the upside. Major drops followed in 2008 and 2010 from this area. The Bovespa is currently breaking out to the upside. We now see the blue area as a major and long-term support for our bullish case here.

We do not expect to revisit the lows of 2016. However, minor wave 2 may get deep if the darker blue horizontal area gets broken swiftly and early in a reversal. 

Technical Analysis