The Arena

The S&P 500 moved up big today after the Federal Reserve raised interest rates by another 75 basis points. Admittedly, I did not see that move coming. I’m still a little skittish to think the bullishness we’ve seen these past couple of weeks can be maintained. However, we have seen volatility decline over that period so who knows, we may just be witnessing the bottom being formed. Only time will tell…

Given my uncertainty with where the US market goes from here I’m considering heading south to Mexico by way of the Ishares MSCI Mexico ETF (EWW). There seems to be a nice basing pattern forming near the current level and price has tried to move lower several times without success. I guess we’ll see soon enough…

The Coach

Today I’m considering a bullish call spread in the Ishares MSCI Mexico ETF. Price just crossed above the 9 EMA and is currently trading near a longer term support level. Additionally, since Mexico’s base jump from Peak $55.83 earlier this year price is trying to consolidate near the $45 dollar level. With clear uncertainty showing on the chart it’s not unreasonable to think a quick spike in price is possible. Especially if we can get more bullish behavior from other markets around the world.

My technical analysis suggests the Ishares MSCI Mexico ETF is a moderate buy right now. However, with economic uncertainty across the globe at an all time high it’s not unlikely we watch Mexico join a base jumping Facebook group to plan their next dive.

What do you think, does this ETF have what it takes to climb? Time will surely tell…

For more information on the state of Ishares MSCI Mexico ETF in the next few weeks here is some technical information from Financhill.com: iShares MSCI Mexico ETF Stock Predictions

IShares MSCI Mexico ETF Price Chart 7-28-22
MSCI Mexico ETF Price Chart 7-28-22

The Attack

I’m considering a short term play on EWW to the upside with a bull call spread. Volatility has come down some to make the long spread a slightly better value but not so much that price swings aren’t possible. With world wide uncertainty running wild we could easily see EWW move strong in either direction, really. However, looking at the chart alone (and ignoring any common sense) I’m thinking a bullish trade hear could make sense.

That having been said, now is just about time for the current market bullishness to give way to this long clawed bear we know is just taking a nap from feasting on the first half of 2022.

Can EWW move up?

Bullish assumption

Buy To OpenSell To OpenEntry OrderMax ProfitProb. of 50% Profit
19 AUG 22 46 Call19 AUG 22 47 Call$40.00$60.0057%

Bearish assumption

Buy To OpenSell To OpenEntry OrderMax ProfitProb. of 50% Profit
19 AUG 22 45.5 Put19 AUG 22 44.5 Put$32.00$68.0052%

God Bless,
Jeff

*This post is NOT a recommendation to buy, sell, or trade any security. The information provided within is strictly for entertainment. Traders or investors should always consult a registered financial professional prior to trading or investing.