More Options Than You Think

Dip-buyers are making an early attempt to blunt the rare downside momentum bears enjoyed last week in the small caps, and eventually the Nasdaq, too. I suspect that bulls had better hang onto and indeed build on this bounce in order to stave off another afternoon swoon, not unlike what we saw in several instances last week. 

Inside Market Chess Subscription Services, we have one eye on the 2,872 level on the S&P 500 Index. That precise print has been a key technical area for a while now. And despite the small cap bloodbath last week the market may tighten up a but if it keep holding. That said, it is early on a holiday Monday and it is tough to read too much into the action, just yet, which means we must respect the lack of overall upside momentum in the tape until proven otherwise. 

However, even as domestic stocks reset a bit there may be opportunity in Brazil.

That emerging market is gapping up strongly on the back of a political election which the market deems favorable. There are a few ways to go here, with EWZ being the country ETF, and BRZU the triple-long Brazil ETF. 

The two main steel plays in Brazil are GGB, below on its weekly chart, and SID. 

GGB's weekly setup offers a familiar technical theme which many materials/mining names are in since the early-2016 bottom in that complex. The action has been methodical if not tedious, but progress is certainly being made. Once the inflation monster truly rears its head this group could easily explode higher with more vigor. But for now GGB is sporting an orderly weekly triangle consolidation, highlighted below. I view GGB as an actionable long back over $4.30, as well as a few other ideas we are toying with for Members if the Brazil rally does not fizzle out quickly.