A Bullish Breather

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Our strategy of concentrating your Global Bull Market Alert portfolio on a handful of global stock markets that have been top performers in 2010 — the iShares MSCI Chile Investable Mkt Idx (ECH), the Global X/InterBolsa FTSE Colombia 20 ETF (GXG), the Market Vectors Indonesia ETF (IDX) and iShares MSCI Thailand Investable Market Index Fund (THD) — continues to pay off. All four of these positions hit record highs at some point this past week.


Although it is somewhat surprising that markets are rallying in the midst of what is normally a summer lull, global markets appear to have entered a bullish phase. And it’s during times like these that you can make the biggest and quickest profits. So, we’ll continue to stick with what’s working over the coming weeks, focusing on those countries, sectors and stocks that are doing the best. A number of interesting opportunities are arising in the commodities sector, so look for picks in that area in the coming weeks.

At the same time, it’s important to remember that global markets also can be quite volatile, and that you can expect a pullback at some point over the coming weeks. That’s why I’ve tightened your stops on a number of positions, letting you lock in some of your profits if that happens.

Portfolio Update


iShares MSCI Chile Investable Mkt Idx (ECH) hit a record high of $65.35 last Tuesday, rising 4.3% on the week. Although it would be surprising if you wouldn’t see a pullback of some sort from this level, this relatively low volatility pick is a BUY. Raise your stop to $61.30.

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iShares FTSE/Xinhua China 25 Index (FXI) ended the week slightly up. This short position will turn bullish as global markets correct. For now, this bet against China is a HOLD.

Global X/InterBolsa FTSE Colombia 20 ETF (GXG) rose to a record $39.45 on Tuesday, before pulling back slightly. As one of the strongest markets in the world this year, GXG remains a BUY. Raise your stop to $36.00.

Market Vectors Indonesia ETF (IDX) hit a record high of $78.28 last Monday, before correcting on some temporary political uncertainty in Indonesia. This short-term hiccup is a good opportunity to add to your position in Asia’s strongest-performing market this year. IDX remains a BUY.


Itaú Unibanco Holding S.A. (ITUB) posted a first-half profit of 6.4 billion reals ($3.65 billion). The bank expects default rates on its loans to remain little changed through the end of 2010, after a sharp improvement in the first half of the year. ITUB remains a BUY.

iShares MSCI Thailand Investable Market Index Fund (THD) broke out to a record high of $51.55 on Thursday, ending the week 2.2% higher in its first two days in the portfolio. THD remains a BUY. Raise your stop to $47.00.

P.S. If you want to keep up with my latest insights on developments in fast-paced global markets, you can now follow me on Twitter on @NickVardy or on my new blog, NickVardy.com.

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