Play Brazil ETF: An Ideal Short-Term Play

Alright, let's clarify right away. That title means the iShares MSCI Brazil Index Fund EWZ is definitely worth watching over the next couple of days. Brazil ETFs have not been much fun to be involved with this year, but EWZ, the most popular of the lot, has started to show signs of life this week, though they are faint. EWZ has been getting a boost on concerns about oil supply disruptions thanks to the Libya situation. This is a dangerous scenario for the ETF because while Brazil is home to vast oil reserves, the exact amount of which is varies widely depending on the source, the country doesn't produce that much oil yet. Petrobras PBR, Brazil's state-run oil giant, produced less than 2.1 million barrels a day last month. Libya and Algeria combined produce about 2.8 million bpd and if that supply came off the market, Brazil would help, but not make up the entire difference. Anyway, perception is reality in the financial markets and EWZ is in play not only because of oil shocks, but because Vale VALE, the world's largest iron ore producer and second-largest mining company reports fourth-quarter numbers after the bell today. Petrobras chimes in Friday after the close. Petrobras securities account for over 20% of EWZ's weight and Vale gets an allocation of 10.15%. Expect Vale's numbers to impress as rival BHP Billiton BHP did last week. Expect Petrobras to lag its integrated oil rivals. Expect EWZ to move over the next few days.