I somehow found myself in Bangkok presenting to a room full of traders for a CMT event a few years ago.
I remember thinking how much I wanted them to like me…
And worrying that they wouldn’t because I had nothing positive to say about their local markets.
The charts were just so bad. There was no way around it.
The Thai Baht and the SET Index had just completed fresh tops. These trends were undeniably lower.
And this was really the case for all the Southeast Asian countries we visited.
Malaysia, the Philippines, and Vietnam were in the middle of some nasty downtrends too.
I wish I had better news for everyone, but instead it felt like I was going from city to city announcing bear markets all over Asia.
I’ll never forget it. I literally felt bad. The people I met out there were trading these markets.
Japan was the only country we were able to say good things about on our trip. They were an early cycle leader.
Years have passed, and the rest of these countries still have not joined the party.
But that’s changing now… In a big way… And I just love to see it.
These countries are emerging as the new global leaders… at least over the short-term.
Indonesia, Singapore, and Vietnam ETFs have all rallied almost 25% from their lows last month. Even Hong Kong is up about 22%.
Taiwan is number one in terms of the strongest bounces off the lows, with a 29% rally in EWT.
Thailand is third on our leaderboard with about a 26% gain off the lows from April.
My point is we’re seeing a synchronized momentum surge from Southeast Asian countries right now. The relative strength is off the charts.
When I was there in the summer of 2023, it was a broad-based bear market. The complete opposite.
So I will admit I have been waiting for this day for some time, and couldn’t be more excited.
This region of the world offers some of the most exciting growth opportunities for global investors.
And these countries are coming off depressed valuations, extreme bearish sentiment, and multi-year downtrends.
I think they are ripe for a turn. A big one.
Back to Thailand. Here's the MSCI Thailand ETF:
THD has been digging in and holding support at this 50 zone for the last decade and a half. The bears just can’t break it down. They keep getting chances and they keep failing.
At a certain point, there’s only one other direction to go in.
THD has been a giant sideways mess for long enough. I think it’s time for a new uptrend to take hold and there couldn’t be a better level to get involved than right here.
After a major shakeout at the lows last month, THD is now one of the international leaders.
I’m getting behind this momentum and building a starter position. I began scaling in a few weeks ago and plan to add more in the future.
And for me, it’s all about the currencies when investing in international ETFs.
The way the Thai Baht looks right now tells me THD has some serious legs.
This is a textbook bearish-to-bullish reversal pattern and it’s one green candle away from completing.
The line in the sand is 0.031.
Foreign currencies continue to gain against the dollar with more emerging countries joining the action with each passing day.
I think Baht is next. If and when this base completes it will set the path of least resistance higher for Thailand.
I’m long THD and Sea Ltd is my favorite individual name that offers exposure to the country. Grab Holdings gets an honorable mention.
Those two are the anchors for my Southeast Asia exposure.
Speaking of exposure, we’ve been adding aggressively to our long bets via Breakout Multiplier. We hit it out of the park with some of our emerging market calls recently. And we plan to do it with more in the future. I broke down our strategy and the proprietary indicator we use to make the magic happen on today’s livestream.
