Dilma Rousseff, a former guerrilla turned economist and key confidant to Brazilian President Luiz Inácio Lula da Silva, was elected Sunday to succeed him in a runoff vote against Jose Serra, former governor of Sao Paulo and minister to Fernando Henrique Cardoso, Lula’s predecessor.

Rousseff’s victory was widely seen as an endorsement of Lula’s policies, enacted over eight years in office, and a desire to continue them.

Brazilian equities have been consolidating for the past month and look ready to break higher.  The Brazilian ETF (EWZ) is primed to take out the recent high of $81.30.  Many are expecting a market wide “sell the news” correction after QE2 and the U.S. election.  We’re not so sure and think the sell-off will much more shallow as there is just too much under invested capital.  We are more concerned with potential currency volatility and how the Bank of Japan may respond to QE2 with its own QE.  Stay tuned!