Vietnam ETF Looks Ready For More Pain

On news of another Dong devaluation, the Market Vectors Vietnam ETF

slipped more than 2% on Wednesday and it appears the ETF could be poised for pain on the downside. A Credit Suisse report said it's too soon to be bullish on Vietnam and that the Southeast Asian economy still faces challenges. For the bears, this is good news, because previous news to a similar effect has led to substantial losses for VNM, sometimes in a matter of days. According to Bloomberg, Vietnam's benchmark VN Index is the worst performing index in the world thus far in August. In other words, you don't be long VNM at this point. After the August losses, the index is now valued at 9.6 times estimated earnings, down from this year’s high of 13.5 times reached on March 12, Bloomberg reported. With other economies in the region (think Thailand, Singapore, Malaysia) looking strong, there is no reason to be involved with VNM for exposure to Southeast Asia. If support at $22 is violated, look for a drop to $16-$17.