Brazil's Blast

China has been in the limelght for as long as I can remember. But right now, the star performer happens to be Brazil, not China. Back in January, market analysts were talking about Brazil being another "China-like miracle." Yes, Brazil is one of the greatest beneficiaries of the China boom. Plus, just this week, Standard & Poor's surprised the financial markets with an upgrade of Brazil's credit rating, immediately prompting another surge in Brazilian assets.

Brazil's currency, the real, jumped by the most since September 01, hit a new six-year high & busted through the 2-per-dollar level for the first time since 2001. Bottom line: This year, Brazil's market is leaping forward at a pace that's even exceeding the rapid rises in China & surrounding areas!

Just look at the numbers above: In Asia, exchange traded funds linked to some of the strongest markets like Hong Kong, Singapore & China are up 15.7%, 23.8% & 25.3%, respectively. But, in the same time frame, the ETF linked to Brazil's market is up by 36.8%! The rise of Brazil & China should come as no surprise. In fact, each market is now taking its turn shifting into higher gear & accelerating. They consolidate for a short while, & then, one by one, they blast off. This a very unique yet interesting situation.

I think there must be powerful forces acting behind the blast-off in Brazil's market this year. I don't think I really have the answer here & now. No one has all the answers. But no answer can ignore the ever-present possibility of a correction, which typically comes without much warning. I will attempt to put up some forces at work behind this blast some time later, if I find that sometime.

Till then, be nice, & be safe, or else, be careful. Don't do what I won't do...