Key Market Views: Short IGPA View Under Attack

At the start of this month we turned outright bearish Chilean stocks, after suggesting that the all-share IGPA index was coming awfully close to it's all-time high of 15,677. For some time now we have been expecting a correction in the index, with the monthly chart implying a possible 'double-top' formation. That said, following several weeks of volatile trading - admittedly within a narrow range - we remain generally bullish in our outlook on global equities. This is highlighted by us targeting 10,000 for the Dow (see yesterday's Global Daily Financial Alert), and our 'long Brazilian stocks' view in our portfolio, in which we continue to target 64,000 for the Bovespa. Indeed, while our bullish Bovespa view is playing out nicely, up 5.8% in our key market views portfolio since initiating the position on August 4, we are currently taking losses on our IGPA view (down 2.6% since September 2).

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