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Here’s Why Mexico Might Not Be Hurt By Trump After All

From Dana Lyons: Despite the nation being targeted, trade-wise, by the new administration, the Mexican stock market is technically set up favorably.

This morning on Twitter and StockTwits, our Chart Of The Day was of the “Mystery” variety. And like our previous Mystery ChOTD, this was an international index again. We presented it as a monthly chart to accentuate its “big picture” message.


Among the chart’s intriguing aspects is the fact that the index consolidated for roughly 3 and a half years before breaking out in early-mid 2016. And following a test of that breakout point around the time of Donald Trump’s election as U.S. President, the index has burst higher again, into all-time high ground. The big picture message is that there is nothing here, from a technical perspective, to prevent this index from commencing a new, longer-term up-leg from this point.

Part of the reason we made this a Mystery chart was to remove any preconceived bias that chart observers may have toward the index, based on exogenous influences. We could envision the potential for such bias considering the subject country represented by the Mystery index: Mexico.


We bring up the issue of bias because folks may intuitively think that Mexico will be dead money during a Trump Presidency. The country has been a transparent target of the administration on a trade front, not to mention the immigration issue. But while these issues may logically bring about trepidation among investors when considering betting on Mexico, that trepidation is not borne out in the chart of the Mexico IPC Index, which is right now hitting all-time highs.

This is a good lesson for investors regarding the need to focus on strictly market-related data when making investment decisions. Outside factors typically have little or no sustainable impact on prices, at best. And, at worst, more often than not, they result in the opposite influence, psychologically, than what is correct, investment-wise.

The iShares MSCI Mexico ETF (NYSE:EWW) closed at $51.17 on Friday, down $-0.46 (-0.89%). Year-to-date, EWW has gained 16.37%, versus a 5.46% rise in the benchmark S&P 500 index during the same period.

EWW currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 20 ETFs in the Latin America ETFs category.

So how does one profit from opportunities in Mexican stocks? At our new “all-access” site, The Lyons Share, we outline for members the vehicle and parameters for taking advantage. Check out The Lyons Share!

Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

This article is brought to you courtesy of Dana Lyons, JLFMI and My401kPro.

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