I'd at least wait to get some direction from the Chinese market first. There was talk of some kind of stimulus package coming from the Government this w/e which doesn't seem to have materialised. Only can find stories about another chemical plant explosion. Also, the plunge protection team apparently had to work hard on Friday buying shares to save the Shanghai exchange from falling below 3500. With so many Chinese investors now underwater and highly leveraged there is a chance this could get even worse. If the markets drops below 3200 and breaks support levels then it could be Goodnight Irene.
On a positive note, there is a good chance the Chinese government will intervene before this happens as they seem to be under huge political pressure to rectify a situation they created. I watched Inside China on the w/e, was an episode about a farmer who was advised to put money into the stock market. Seems he used some family money as well but I missed the first few minutes. He put $200K and they leveraged him up to $500K. Now he's under water and the broker form saying he has to sell his shares and all is gone. He is going to the Securities Exchange to see what they can do for him. Was quiet sad , I've never see an Asian man cry like that - i know that could be construed as racist but I normally only see the stoicism in the Asian culture which to some extent I admire. You need to remember that for the first 6 months of the year they were opening 200 to 300K stock brokerage accounts a week some leveraged 2 or 3 times. This is a dangerous situation and one I can't reconcile in my mind especially considering the Chinese market is still priced at above 50 times earnings.
