Equities: Bearish Sentiment Prevails

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Equity indices across Latin America have taken a serious beating at the start of the week, as more bad news from the US financial sector has seen global financial market volatility shoot higher. A number of reversal patterns, which we flagged in February, are currently playing out, and believe that several short-term support levels will be tested over the coming weeks. Although short-term rallies and bounces remain a distinct possibility, we believe that upside resistance is currently stronger than downside support, and as such, any short-term rallies will be capped, in our view.