Price action and policy action are a concern for investors who have watched Brazil  (EWZ, quote) quietly become one of the better performing EM markets in 2015. After running 26% from Feb 2 on the Ibovespa despite a currency that sold off hard into March (2.60 to 3.30) but rallied back some, you are +9%.

brazilVale (VALE, quote) and PetroBras (PBR, quote) gave you some reason to believe that the state was going to get their house in order and also stop killing the golden geese. But big rallies in both names have given way to big profit taking and no real committed crossover money. Vale move from $9.0 back to $6.50 was frightening. We traded this hard in late April and missed the final surge but got out with hefty gains. Overall, the last two weeks have been hard on this trade and we feel Dollar pressure, Commodity pressure and more importantly, domestic policy pressure will keep the index and currency under wraps in the near term.

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