Tuesday, December 8, 2015

Asian Tiger Cub Markets.........ANOTHER PESKY FACT!

Asian Tiger Cub Markets

The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that these economies are on a similar, albeit slower, growth trajectory as the original Asian tigers: Hong Kong, Singapore, South Korea and Taiwan.

After failed breakouts earlier in the year, the charts of the Asian Tiger Cub markets suggest more trouble may lie ahead.

Scanning the charts of various markets can, at times, give us a head's up on a potential source of positive or negative "news" before the market hits the mainstream radar. Such may be the case currently in the Asian Tiger Cub markets – in a negative way.

Here is the updated chart of the Asian Tiger Cub Composite.



As the chart shows, after the failed breakout to all-time highs earlier in the year, the Composite broke its post-2009 UP trendline in August, preceding a precipitous decline. Unlike some other markets around the globe, the Composite's bounce since has been feeble, at best, barely recovering a quarter of the decline. This suggests that the breakdown was a significant event and further declines are likely ahead.

A look at the individual countries reveals, not surprisingly, a similar picture. 

Indonesian JSX

After breaking out to all-time highs earlier in the year, the Indonesian JSX Index was unable to hold above its prior peaks. Subsequently, the index broke its post-2009 UP trendline in August, also preceding a precipitous decline. Its bounce too has been lackluster.



Philippines PSE

Likewise, the Philippines PSE Composite suffered a failed breakout to all-time highs earlier in the year, followed by a break of its post-2009 UP trendline in August. Its bounce since has been especially weak.



Thailand SET

Next we see the Thailand SET Index., The SET failed to break out to all-time highs earlier in the year, instead rejected by highs from 2013 and the mid-1990′s. It also has since broken its post-2009 UP trendline. Its weak bounce since is on par with that of the Philippines.



Malaysia KLCI

Lastly, the Malaysia KLCI Composite may be a bit more positive or negative depending on the perspective. The KLCI was able to break out to new highs back in 2012. However, after a nice run, it dropped back down in 2014, breaking below its post-2009 UP trendline. Even worse, during the August decline, the composite broke its post-1998 UP trendline.



The Asian Tiger Cubs suffered extensive damage in the August global equity decline. Each has broken at least its post-2009 uptrend. Potentially making matters worse, the breakdowns come after several of the markets broke out to all-time highs earlier in the year. Just as troubling is the fact that their respective recoveries have been relatively anemic. 

These recent developments suggest that greater eventual declines are likely ahead for these markets.

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