I don’t expect China to collapse. But they will have some serious pain ahead. The economy is based on exports and they are seeing their major buyers of their exports pulling back rapidly. They are already seeing lots of businesses and factories go under and people being out of work and we are just beginning to pull back here and in Europe. This time next year you will get a much better idea of how bad it will be for them. Playing a bounce on China is a fine for the day trade or short term. But the long term direction is still down.
You need to take my opinion with a grain of salt however because I think going long any equity market longer then to play market swings is a fool’s game. All of the equity markets for the next year will be heading south but with very violent bear market rallies to wipe out slow and weak shorts.
