Brazil held an election. Brazil's stocks held their breath. Then they held a sell-off.
Luiz Inácio Lula da Silva beat Jair Bolsonaro in the runoff. Bolsonaro reportedly declined to concede. Markets reacted like a man who just read his own brokerage statement.
Here is the detail that matters. Lula lost the first round, then won the runoff. That has never happened in Brazil since direct elections returned in 1989. Thirty-three years of history, and Lula just broke the pattern. Your chart pattern, meanwhile, is a head and shoulders drawn by a guy named Kyle.
Technical analysts have a name for what happened here. It's called a candle. Red, mostly. The Bovespa and the Brazilian real wobbled because investors don't love uncertainty, and nothing says uncertainty like a sitting president ignoring the concept of losing.
Retail traders will call this a buying opportunity. They call everything a buying opportunity. A house fire is a buying opportunity if you squint and own a hose.
Some of you bought EWZ on Sunday night because a podcast told you emerging markets were "due." Due for what? A lesson? You're a pupil, and the tuition is your down payment.
Bolsonaro's silence is the real story. Concession speeches take four minutes. He's been working on his for days. That's longer than your average options position survives, and you still think you're the one with discipline.
Analysts will now explain why this was priced in. It was not priced in. If it were priced in, the price would not have moved. That's the entire definition. Put the pen down.
Brazil will sort out its politics. It has institutions, a Supreme Court, and a calendar. You have a Robinhood account and a theory about Petrobras.
Bolsonaro can take all the time he needs. Your portfolio already conceded.
Photo by Matheus Câmara da Silva on Unsplash
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