With olympics coming up (opening on 8/8/08), I don’t think the Chinese will be selling stocks like crazy during the game and the govt will try its best to prop up the stock market just to not lose any face during the game.
I suggest to buy till middle of August!
I believe we are in a short term up cycle now, simply for the two reasons:
i) Olympics coming. Chinese stocks should not go down further as there are rumours that the government will support the stock market at least throughout the Olympics (the government will not allow any bad showing about the country within the Olympics period - just not to lose any “face”
ii) Seems like financials stocks are gaining back some strength now. The world stock markets have been hammered badly mainly because of the under-performance of financial stocks. But now they are gaining back strength and hopefully will prop up the market for a little while.
While in longer term I believe we are in a cyclical bear market now. So exit quickly after you have earned a modest amount.
As for writing, the Dow is now down 160 points and NASDAQ is down 3o points. The first day in the second half of 2008 doesn’t look too good. The main concern among investors is mainly the rising price of energy and commodities. There is definitely a sign of bubble in energy and commodities. There just needs a catalyst to pop the bubble. But when will the catalyst? Nobody knows. When it comes, it will be totally unexpected and wipe people out.
