China’s Plummeting... Is It Time To Sell Stock?

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• Hi, My name is Aaron and Im with Penny Stock
  Research, today were reviewing our recently
  published article

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Chinas Plummeting... Is It Time To Sell Stock?
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Chinese Stocks Plummet - Should We Sell Stocks
Too?
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Its ugly out there. You cant go three minutes
without seeing news on the plummeting market in
China. Everyones asking is now the time to
sell stocks? Ill give you the answer in just a
moment but first how bad is it in China?
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Chinas U-G-L-Y! Just look at this chart of the
market.
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(No Transcript)
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This is a weekly chart of the FTSE China 50 Index
FXT. It tracks some of the biggest stocks in
China.
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As you can see, weve given up not only the gains
for the year but the market is quickly
approaching its 200-day moving average. And
its already blown through the 50-day moving
average.
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Its an ugly chart and one you need to keep an
eye on. Why? I have one word for you contagen.
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Look, for the last few years, Chinas been a big
global economic driver. They have billions of
people working and spending and driving their
economy. But their economy is looking weak.
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How do I know? If youre a long time reader of
this newsletter, you know that the stock market
is forward looking. The stock market represents
what investors see down the road.
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And right now investors in China are saying the
economy looks ugly. really ugly. The bloom is
off the China rose And it may take a while for
this flower to bloom again. Whats going on?
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Chinas Market Growth Is Slowing
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After years and years of rapid and ever expanding
growth China is finally starting to slow
down. Now before you throw up your hands in
frustration, let me tell you something. This is
NORMAL.
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Chinas now reaching a stage of growth where
continuing to grow at 10 rates or more is
virtually impossible. Their economy is so big,
and so developed, the easy gains have been made.
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What we're seeing is a seismic shift from rapid
Chinese growth to moderate Chinese growth. Any
way you slice it, their growth rates are still
better than the US markets! Now heres the risk
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The Real Risk Of The Chinese Implosion...
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The reason Chinas important is because of all of
its trading partners. If China slows
significantly, it will impact countries who trade
with China.
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Think Australia, which sends billions of dollars
of commodities to China. Think the US, who
trades billions and billions of goods with China.
Think Canada, another major supplier of goods to
China.
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If the major trading partner slows consumption,
youre going to see companies providing goods
plummet as well. And thats the risk.
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There are many US based companies that make a big
portion of their profits in China. One example
is Yum Brands YUM In mid-May, YUM was trading
as high as 95 today you can buy the stock for
about 85.
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Freeport MacMoRan FCX is a major provider of
copper to China. Freeport was trading around 35
just 12 months ago they hit a low of under 20
three months ago today you can grab shares at
12. Just look at this ugly chart.
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There are hundreds of companies just like these
with big exposure to China and its helping
drive stock prices lower. This does impact the
US markets, and puts added risk into our
markets. But thats not whats scaring me.
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What Really Concerns Me About The Market Today
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While Chinas a risk this chart scares me more
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• This is the Russell 2000 Index which is a measure
  of the smaller stocks in the market. Im
  concerned over this key chart. The index
  plummeted through the 50-day moving average and
  the 200-day moving average is providing minimal
  support.

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• So, we sell everything right
• NO. What you do right now is lighten up. If you
  have a big winner, sell half. Have a big loser,
  dump it and record the loss to offset future
  gains.

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• Move a big chunk of your portfolio into cash so
  you can scoop up deals if the market weakens
  further.
• Finally, if you see a continued plunge below the
  200-day moving average start shifting more
  assets to cash.

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• You cant be too careful right now especially
  going into the September and October months.
  Those are historically the weakest months of the
  year.
• Are you moving to cash? If not, why not? Let me
  know on the blog.

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Good investing
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