The Global Bull Takes A Breather 4

This is all part of the normal ebb and flow of the markets. And after three consecutive down days, European markets are up sharply this morning, poised to bounce back from the two-week closing lows hit on Friday.

I expect another leg up in global markets before the end of the year. At that point, I expect to recommend that you both tighten some of your stops and take some profits. That said, there are two positions in your Global Bull Market Alert portfolio that have hit critical technical support levels — the First Trust ISE-Revere Natural Gas (FCG) and the iShares MSCI Turkey Invest Mkt Index (TUR) — and I am moving them to a HOLD this week. Otherwise, your current portfolio is well-positioned to take advantage of the final third of the Q4 rally.

This week, I am writing to you from Port Said, Egypt, after having had the chance to visit Greece, Turkey and Israel this week as part of Mark Skousen’s Freedom Fest Mediterranean cruise. Having regularly visited these four countries as part of my beat as a global emerging markets fund manager, I can confirm that they have made substantial visible progress during the past ten years. Thanks to the Olympics, Athens, Greece, today boasts an airport and metro not unlike San Francisco’s BART. The Turkish economy is 50% bigger than the last time I saw it in 2001, its southern coast dotted both with multi-million dollar condominiums and the people who can afford them. Israel’s infrastructure and world class tech sector are all the more remarkable given the millstone of its Palestinian problem. The combined economies of Greece, Turkey and Israel (population 90 million) are substantially larger than that of India (population 1.1 billion). Yet, when is the last time you saw Israel or Turkey on the cover of Business Week?

Portfolio Update

The iShares MSCI BRIC Index ETF (BKF) ended the week flat, after reaching a high for the year of $47.65 last Tuesday. With BKF back off of its highs, it remains a BUY.

Market Vectors Brazil Small-Cap ETF (BRF) also hit a record high last Tuesday, before ending the week slightly down. Your bet on Brazilian small caps remains a BUY.

The iShares MSCI Chile Investable Market Index (ECH) hit a record high of $52.80 a week ago before ending the week on a down note. One of the steadiest players in emerging markets, ECH remains a BUY.

The iShares MSCI Israel Cap Invest Mkt Index (EIS) hit a high of $52.29 last week, before pulling back. Israel remains a BUY.

The iShares MSCI Hong Kong Index (EWH) jumped back over the $16 mark last week, before pulling back. Hong Kong remains a BUY.

SPDR S&P Emerging Markets Small Cap ETF (EWX) hit a high of $47.60 last week, reaching new highs for the year. This volatile bet is a BUY.

First Trust ISE-Revere Natural Gas (FCG) fell back to $16.00. If FCG falls through this critical level, I may look to sell this position. For now, I am moving this position to a HOLD.

ICICI Bank Ltd. (IBN) ended the week slightly lower. With India one of foreign investors’ favorites, IBN remains a BUY.

Mechel (MTL) hit a high for the year of $21.67, before pulling back. I am looking for Russia to pull away strongly toward the end of the year. MTL remains a BUY.

The iShares MSCI Turkey Invest Mkt Index (TUR) hit a high for the year of $51.64, before pulling back sharply. The sharp sell-off is a bit unnerving. Turkey is now a HOLD.

P.S. If you want to keep up with my latest insights on developments in fast-paced global markets, you can now follow me on Twitter on @NickVardy.