Our opinion is that the fundamentals for the Thailand SET are no longer relevant. Last Wednesday, Thailand's Finance Minister, Mr. Sommai Phasee, told Linda Yueh of BBC that democratic elections could be delayed and would not occur for another 18 months. Surprisingly, the Thailand SET completely ignored the “Thai election pushed back” news. 

Just a reminder, on December 19, 2006, the Thailand SET took a nose dive from 730.55 to 587.92 (~ 20%) as General Sondhi Boonyaratkalin said there will be no vote for another year. What is the big difference between then and now?

Since we are now in the “It doesn’t matter, until it is matters” trading mode, one should always have both entry and exit strategies from the market. I would want to understand the market technicals and wouldn’t hesitate to execute the buys and sells. In this type of market, it is the fastest who wins!

Because most of the trading on the Thailand SET will be done through algorithmic trading, program trading or black box trading, whatever one prefers to call it, try to understand the headline risks in advance and also figure out whether “it matters or not”. Again, it is better not to take excessive risks and always be ready to liquidate positions before it really “matters”. I’m not bearish on the Thailand SET, but just extremely cautious.

It looks like the weak currencies are taking a bite out of Thailand consumer staple stocks, such as CPF. Most of the global integrated oil and gas companies, such as BP, Total and Exxon, took a major hit this week as crude oil took a 8% nose dive. Thailand state-controlled PTT is still nicely buoyant, while PTTEP only got taken down 5%. I thought that the gasoline price in Bangkok would be below 35 Baht/liter by now. Obviously, we are wrong.

Technically, a bullish “Tweezer” bottom is in at 1567.32-1567.31. Tweezer patterns occur when two or more candlesticks touch the same bottom for a tweezer bottom pattern, or top for a tweezer top pattern. The Thailand SET is running between 1591 and 1602, where 1591 becomes a near-term support and 1602 is the near-term resistance. The reverse H&S will breakout at 1602, sending the Thailand SET to the upper range of ~1660. My strategy is to start trimming my positions at around 1650.