Thursday, October 29, 2009

Bookkeeping: Starting Stake in Market Vectors Brazil Small-Cap (BRF)

Looks like we will begin the day with yet another gap up....while news driven, it will be interesting since it will take us back over the 50 day moving average.  In the longer term this just creates another gap to fill down the road...for now we get to see if the exact same pattern we pointed out Monday plays out; that is a 45 degree angle multi week rally after every selloff the past 3+ months.  With all the damage in individual charts we saw yesterday it would seem improbable but this entire market would be deemed improbable nowadays.

With the weakness in Brazil the past week, we are going to take this opportunity to begin a long term stake in Market Vectors Brazil Small-Cap (BRF).  We highlighted this name in the summer under $29  [Jun 2, 2009: Market Vectors Brazil Small Cap (BRF) - a New ETF for Exposure to Brazil]  It was a new ETF so we were not ready to jump in, but it has had a great run, and has enough volume on a daily basis to show others are interested in it as well.  Obviously if the dollar corrects in the weeks to come, foreign exchanges will take a hit blah blah blah.  But this just might be our favorite market on the planet right now, and with the stopping out of most of our only Brazilian position yesterday, it's a good place to begin a stake.  We'll start modestly with a 1% stake and if there is weakness in the coming months look to add - eventually I'd like to make this a large weighting in the fund.   I'd like to be a buyer in scale somewhere int he lower $30s if afforded the opportunity in the months to come.  I am not using any sort of technical analysis or "trading" it, we're wanting to build a core position here for the very long run.

For now, we'll get started in BRF with a buy at the open...

Long Market Vectors Brazil Small-Cap Fund in fund; no personal position

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