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.
