In June of last year I wrote about the double top in Mexico’s stock market ETF, EWW and the (blue) bear flag that was forming which I posted in the chart below. You can see at the time, I labeled the breakdown target from the flag with a black horizontal line which came in around the prior 2011 lows at ~$45. This projected to a 20-25% loss depending upon where you measured the starting point from (the top or bottom of the flag)

Fast forward to today with an updated chart below. You can see we hit the target not once but twice and sit just above the line.  This confirms how important this price as support as it has now bounced off 4 times over the past 4 years.

For those that followed along, congrats but it’s time to lock in the 20+% profit and move on. But is it? You see, when prices are strongly trending (in either direction) many times once one pattern has completed another one forms and EWW is no different. In this case we have now formed a very large, bearish complex head and shoulders topping (in red) pattern which brings with it a much larger potential for profit if it breaks down and you are short. A break and confirmed move below the neckline could be the beginning of the start of its next leg down. While it is hard to write this because it seem so implausible,  the pattern target projects down at around $20, some 43% lower than where we sit today and back right at the 2009 lows. If this works out all I can say is Ay Carrumba!