Market Cycle Stage-November 2025
The index is now trading around 51,000, having accelerated strongly from the ~46,000 breakout level. The move is characterized by tight, persistent bullish candles and very limited pullbacks. The price is in clear price discovery, above all prior resistance levels.
The 50-day moving average (green line) is sloping strongly upward and remains untouched by price for multiple weeks a hallmark of euphoric trend behavior.Momentum is strong, everyone is in, and nothing can go wrong.”
This is the final phase of the cycle before overheating, but the trend is still active and dominant.
Technical Analysis Summary
Support & Resistance
Psychological round numbers like 52,000 and 55,000 may act as soft resistance.
Support Levels:
47,000–47,500 – recent breakout zone and near MA.
46,000 – major structural base from mid-year.
Resistance Levels:
None in sight — market is in price discovery mode.
MACD (Inferred)
Given price action:
- MACD is likely very positive, confirming momentum.
- Potential overbought condition may emerge soon, but no evidence of reversal yet.
Momentum remains strong, and MACD likely aligns with price trend.
Macro &Event Overview
Market Cycle Stage-October 2025
Price has just made a new all-time high above 47,700, breaking out from a multi-month consolidation. The price is well above the 50-day moving average, which is rising steadily, indicating healthy bullish trend conditions.
The structure shows consistent higher highs and higher lows, with clear and strong bullish momentum. This behavior typically reflects the “Thrill” phase of the market cycle, where confidence is widespread, and traders are aggressively participating in the rally. Thrill: “We’re right, the market is strong. Let’s add more!”. Next stage could be Euphoria, if acceleration and overconfidence begin to dominate.
Technical Analysis Summary
Macro &Event Overview
Monetary Policy & Inflation
Interest Rate Path. The Central Bank of Chile (BCCh) began its easing cycle in July 2025, cutting the policy rate from 5.00% to 4.75%.
Inflation is declining, but service inflation and energy adjustments keep short-term price pressures elevated.
Inflation Forecasts
2025 year-end inflation is projected at ~4.3–4.5% (headline).
GDP Growth & Domestic Activity
The BCCh forecasts growth between 2.0–2.75% for 2025.
Sector Performance
Copper exports continue to be a pillar of growth, aided by high prices and new mine output. Services and construction are recovering, while retail remains mixed. Investment sentiment has improved slightly but remains cautious.
Fiscal Policy & External Sector
Public Finances
Chile continues to run modest fiscal deficits, with public debt around 40% of GDP low relative to the region.
Current Account
The current account deficit has narrowed to ~2.5% of GDP, reflecting strong export earnings and weaker import demand.
Commodity Dependence
Chile’s export base remains concentrated in copper (40–50% of exports). A downturn in Chinese demand or global commodity prices poses downside risk.
Political Landscape & Risk Factors
Markets are watching closely for policy continuity vs. potential populist shifts.
General Elections – November 16, 2025. Chile will elect a new president and National Congress.
Market Cycle Stage-August 2025
The index is in a parabolic uptrend, with minimal pullbacks.
Price is at new all-time highs, breaking decisively above previous resistance zones. The market has shown multi-month trend strength, with very shallow consolidations.
Price remains significantly above the 50-day moving average, which is sharply rising. Psychological sentiment likely includes overconfidence and “buy-the-dip always works” mentality, classic euphoria traits. Euphoria: “We’re geniuses! This market only goes up.”
Technical Analysis Summary
Support Levels:
42,000–42,500: Most recent breakout area and MA zone.
40,000: Psychological support and previous consolidation base.
Resistance Levels:
No clear technical ceiling — index is in price discovery mode.
Key Insight: There’s no overhead resistance — trend will likely continue until sellers step in or momentum fades.
MACD
MACD is likely rising sharply, consistent with this vertical trend.
No divergence visible from price structure. Histogram likely positive and growing.
Macro & Event Overview
Monetary Policy & Inflation
Interest Rate Path
In July 2025, the Central Bank of Chile cut the policy rate by 25 basis points to 4.75%, marking the first rate cut of the year.
Macro & Event Overview
Monetary Policy & Inflation.
Interest Rate Path. In July 2025, the Central Bank of Chile cut the policy rate by 25 basis points marking the first rate cut of the year.
Inflation Outlook. Annual inflation is around 4.4%, mainly due to recent electricity price hikes.
GDP & Economic Activity
2025 Growth Projection. The Central Bank revised GDP growth for 2025 to 1.75–2.75%, up from earlier estimates.
Fiscal & Structural Reform Agenda
Public Finances. Chile maintains a relatively low debt-to-GDP ratio (~40%) but faces pressure from public wage and pension spending.
Productivity & Investment Climate. The government is promoting reforms to improve infrastructure, permitting processes, and green transitions.
External Sector & Commodities
Copper Prices & Export Dependence. Chile is the world’s largest copper exporter. Copper prices have remained firm.
Trade Partners. Strong export demand from China and the U.S. continues, though some softening in Q3 is noted due to global slowdown risks.
Electricity Prices. A regulated price reset in May triggered a 1.45 pp spike in inflation and raised business energy costs — a one-time shock that is expected to fade into 2026.
Political Environment & Reform Risk. Upcoming Presidential Election (Nov 2025). Uncertainty around environmental legislation (especially mining regulations) is another risk.
Business Sentiment. Investors are cautiously optimistic but highlight the need for more predictable policy frameworks, especially regarding climate, mining royalties, and permitting.
International Assessments
IMF & OECD Outlooks. The IMF forecasts GDP growth of 2.0% and inflation of 4.4% for 2025.
Market Cycle Stage-July 2025
The market has broken out to new highs with strong momentum, as the MACD turns sharply higher and price holds above the 50-day moving average. Resistance levels are being cleared with ease, and the June–July consolidation provided a base for this next leg up. This marks Stage 9 “Belief “, where confidence grows that the rally is real, and moves toward Stage 10 Excitement, as investors grow eager to add more.
Technical Analysis Summary
Trend & Price Action
- Support Levels:
- ~41,000 – key structure support (red step).
- ~40,000 – base from July’s consolidation and MA zone.
- Resistance Levels:
- Recently broken: ~42,500 and 43,000
- Price is now at new highs resistance becomes psychological only, not technical.
Price is in price discovery mode; no overhead supply. Momentum could accelerate further.
MACD (Momentum Indicator)
- MACD line recently crossed above the signal line.
- Strong upward momentum building MACD value rising rapidly.
- The previous MACD low in July marked the end of the last corrective phase.
Momentum confirmation supports a new leg of the trend.
Macro &Event Overview
Monetary Policy & Inflation
- June 2025 (Pause in Rate Cuts)
At its June meeting, the Central Bank of Chile maintained the monetary policy rate (MPR) at 5.00%, signaling cautious optimism. The Board indicated that rate cuts were likely in the coming quarters, although external uncertainties including geopolitical tension and global volatility could delay easing into late 2025 or early 2026. - July 2025 (First Rate Cut of 2025)
On July 29, the Bank reduced its interest rate by 25 basis points to 4.75%, marking the first cut this year. The decision followed a decline in headline inflation, which appeared more under control. - Inflation Trends
- Inflation stands above target, around 4.4–4.5%, driven partly by recent electricity tariff increases. Core inflation continues its downward trend, hovering near 3.7%–3.8%.
- The Bank projects inflation will ease to 3.8% by end‑2025, and converge to the 3% target by early 2026.
Economic Growth & Activity
- 2024 Full-Year Performance
The economy expanded by 2.6% in 2024 beating forecasts boosted by strong exports and internal demand, despite a slowdown in Q4. - 2025 Growth Outlook
- The Central Bank raised its 2025 growth forecast to 1.75–2.75% (from its earlier projection), maintaining 2026 at 1.5–2.5%.
- Other forecasters like the OECD and BNP Paribas estimate growth between 2.1–2.4%, aided by stronger domestic demand, wage increases, and healthier household consumption.
- The OECD notes the economy may sustain 2.4% annual growth into 2026, outpacing trend growth, but urges fiscal discipline to support long-term sustainability.
Market Cycle Stage-June 2025
The CLX index appears to be in the ‘Optimism’ phase of the market cycle. This stage is marked by growing investor confidence, increasing participation, and a steady upward price movement without excessive speculation.
Technical Analysis Summary
Trend & Price Action
– Support Levels:
– 5,400: Local support tested multiple times recently.
– 5,100: A major support line from 2024 lows.
– Resistance Levels:
– 5,900: Currently being tested.
– 6,100: Long-term resistance from previous highs.
– Trend Direction:
– Short- and medium-term trend is upward.
– Pattern of higher highs and higher lows confirms bullish momentum.
Moving Averages
– 50-day MA: Rising and acting as dynamic support — bullish.
– 200-day MA: Rising steadily; price is trading above both averages.
MACD
– Histogram: Positive and increasing, indicating growing momentum.
– MACD line is well above the signal line, suggesting continued bullish strength.
RSI (Relative Strength Index)
– RSI is near 68–70, which is approaching overbought territory.
– Momentum is strong, though a consolidation phase may follow soon.
Macro & Event Overview
1. Interest Rates & Central Bank Policy
– The Central Bank of Chile maintains a neutral-to-dovish stance.
– Rate cuts may be possible if inflation continues to ease, boosting equity valuations.
2. Copper Market Dynamics
– As the leading global copper exporter, Chile benefits from rising copper prices.
– Demand from green energy and infrastructure boosts outlook.
3. Political Stability
– Moderate fiscal and social reforms have lowered uncertainty.
– Improved investor sentiment versus prior years.
4. Social and Environmental Reforms
– Legislative debates on mining royalties and environmental laws could affect mining stocks.
– Final outcomes expected by Q3 2025.
5. Currency Strength
– The Chilean peso has stabilized, supporting foreign investment inflows.
6. Regional Trade and China Outlook
– China remains Chile’s major trade partner, particularly for copper exports.
– Chinese economic data and policy changes are key external risks.
Market Mindset LATAM 
Leave a comment