Today is Cinco de Mayo and for many it conjures up an image of tequila, a margarita or a Mexican beer, sitting at a Mexican restaurant with friends eating chips and pico de gallo. This day is about drinking and friends. I suppose that the Mexican people may do the same thing, but rather to celebrate a real victory.
It was this day 154 years ago that the Mexican Army defeated the French at the Battle of Pueblo. The victory represented a significant morale boost to the Mexican army and the Mexican people at large. It bolstered the resistance movement at a critical time and unified the people in a David beating Goliath type event.
This marked the last time a country in the Americas was invaded by a European military force. It got Mexico past a hurdle and kept morale up until the US could start to provide support again after the Civil War ended.
Why the history lesson? Coming into Cinco de Mayo 2016, Mexico is also at support, the ETF that is.
The chart below shows that the Mexican ETF - iShares MSCI Mexico Capped (NYSE:EWW) - has gone through the same “W” pattern that the US has. It is now consolidating, trying to hold strong, to build for another run higher.
On Wednesday the ETF printed a doji, an indecision candle. Will today bring a confirmation higher? A modern era Battle of Pueblo victory?
There is a lot to overcome in the chart. The RSI is falling toward the bottom of the bullish zone and the MACD is crossed down and falling. Momentum is waning. It needs a boost. A reversal today could give that.
The golden cross holds out promise, as does the series of higher lows. It is unlikely to happen today, but a move over 54.35 would be a very bullish event.
Perhaps today can start that movement.
Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the blog, please see my Disclaimer page for my full disclaimer.