I don’t know much about Peru, outside of the fact that they make some great ceviche.
But I’ve been thinking about the country a lot today.
MSCI Peru $EPU was on a short list of international ETFs that made new highs today.
At first, I was puzzled by this. It was a sea of red out there. Everything got hit. Not just in the US, but across the globe.
Then I looked at the funds holdings and realized how it happened. EPU is basically a big basket of metals stocks. 50% of the fund is invested in materials.
Here it is resolving higher from a multi-year base:
Gold and silver miners were the only stocks that worked today. Both of the shiny metals look fantastic, and I think silver is just breaking out now.
EPU’s exposure to precious metals is precisely why it was able to stick the landing at new cycle highs despite the broad market selloff.
And the more I think about that, I really like it. I got long EPU today and I’m targeting 70.
I want all the international exposure I can get. I’m also always looking for uncorrelated assets. This offers a bit of that too, particularly in the current environment. We’ve had plenty of days this year where metals seem to be the only thing working. I think we’ll have more.
EPU also has some serious copper exposure with SCCO, which is a chart I like right now. It even has a big bank anchoring the fund as the top holding, which is why it pays such a juicy 5% yield.
I’m also in an individual Peruvian stock and have been for a while. This one popped up on the Hot Corner a while back, and it’s been an outperformer ever since.
Here’s the multi-national gold and silver producer, Buenaventura Mining Company $BVN:
As long as we’re above this VWAP from the all-time highs, I like it long with a target of 57.
We’ll have more international trades coming soon. South America is really heating up, and I like what I see in a lot of the ADRs.
Thursday at 2:30 pm ET, Jason Perz from ASC Gold Rush and Sean McLaughlin from All Star Options are doing a special livestream with Joe Duarte, author of Options Trading For Dummies, to discuss the biggest mistakes new options traders make.
