A couple of days ago, I talked about three big reasons I’m long China.

Today, I want to go deeper into the overwhelming bearish sentiment around these stocks and why it could be the perfect catalyst for their next leg higher.

Whether it’s the doom-and-gloom headlines, distrust in the government, skepticism over earnings, or fears of an escalating trade war., the bottom line is— “these stocks are uninvestable.”

Just look at this chart. Short interest in the Large-Cap China ETF $FXI was recently at the highest level it's been in the last year and is still elevated today. 

If you’ve been following me for a while, you know I’ve been long China.

This is a bet against the crowd. Nobody trusts these companies or their numbers—honestly, I don’t either. But I don’t have to. 

I trust price.

And for months now, these stocks have been catching a relentless bid. That kind of price action tells me everything I need to know.

Investors are willing to take the risk, and as long as price keeps confirming it, I am too.

One big reason China is working—something no one’s really talking about—is the quiet rotation happening across emerging markets.

Gold has been an absolute monster since breaking out of that massive base last year.

Gold bugs can't complain—this is what they've been waiting on for years, and now they’re finally getting paid.

They’ve got the ball and are sprinting downfield with no one in sight.

This week, price ripped out of another tight consolidation to fresh all-time highs, just like it did last September.