China's Bear Market???
I know, I know...the Shanghai market is up more than 50% year-to-date. How can it be a bear market? Well, as this interesting post from our friends at Pinnacle Advisory Group shows, that market was down more than 20% from 8/4 to 8/19 -- technically indicating a dreaded bear market.
Here's what they write:
We have to monitor the situation in China closely because this is a very big part of the bullish argument [about a global recovery]...So we are left with the question of how to view this latest down move. The bears would argue that the 108% gain from the bottom was a small bull market rally in the overall context of a bear market started October 2007. The bulls would argue the latest sell off was a normal, albeit sharp, pullback during a strong bull run. Additionally, many argue that this could be a foreshadowing of what could occur in the US markets as China led us out of the bear but will lead us right back into it.
Interesting stuff as you think about how you want to position your portfolio to both play some defense, but also not miss a recovery if it is indeed underway.