Let's have a look at the pattern developing in the iShares Brazil ETF (EWZ).

Forgetting for a moment that this is a chart of the Brazilian country ETF, what should we do with this chart pattern? Let's understand that many charts look like this one: IFN (India), FXI (China), EWH (Hong Kong) just to mention a few. So, do we treat the Nov-June upmove as a completed recovery phase against the BIG bear market?

If we do, then the decline from the 6/11 high at 58.72 into this week's low at 49.39 likely represents the initial downleg of a new bear phase - or at least a return trip into key support in the vicinity of 42.00-40.00.

On the other hand, should we treat the Nov-June advance as an incomplete bull phase that for the month of June is resting/digesting prior to a resumption of strength that is destined next to climb to the 64.50 area, which represents the 50% recovery price of the entire prior bear phase?

Right here both my pattern and momentum work are telling me to treat the EWZ as a rangebound market that will hit resistance next as it approaches 55.00. Support resides at 51.00. Once the rangebound situation resolves itself, I am expecting a loop down that breaks 51-50 on the way to 45.00.