Our New Website Is Here!
As part of our merger with St. Paul Research, we’ve created a new website that will house all of our collective content under one roof, bringing you a higher level of research and service through our analysts’ combined insight, expertise, and perspective. Go to my.stpaulresearch.com to access our new site.

Why You Should Avoid Asia

Developed markets in Asia are stinking up the joint. I don’t want any part of them—and neither should you.

The Nikkei completely fell apart early this morning, crashing through the 14,000 level as the yen hit a six-week high against the dollar. It looks like the comeback that began in late June might be over for the Japanese index….

Tokyo Nikkei Average

The Nikkei has all of the traits of a market that wants to head lower. Japanese investors enjoyed a parabolic run during the first half of the year that didn’t burn out until late May. Now, with another failure at 14,000, additional sharp moves lower wouldn’t surprise me at all…

Meanwhile, the Shanghai composite continues to slog along with no real purpose. In late 2011, the Shanghai broke away from the U.S. markets and began to trend steadily lower. While the S&P has enjoyed total gains of more than 50% over the past three years, the Shanghai has dropped nearly 23%.

Still, a lot of analysts and financial media outlets are attempting to guess when China will finally bottom out…

“China watchers are anxiously awaiting official data on growth, inflation and lending that come out later this month,” reports the Wall Street Journal. “However, high frequency indicators released earlier than the official figures show that July’s performance wasn’t the disaster some bears have been waiting for.”

Maybe so. But price has not reflected the cautiously bullish tone. The Shanghai composite is down a little less than 10% year-to-date. Sure, it managed to halt its June slide. But the sideways action is hardly bullish when you consider how strong domestic markets have been so far this year…

Bottom line: There are better opportunities elsewhere. Don’t get sucked into a Japan or China comeback trade right now. U.S. stocks are setting up for a tremendous year. You don’t  have to leave your neighborhood to enjoy the gains…


Greg Guenthner
for The Rude Awakening

You May Also Be Interested In:

Bitcoin Tumbles – Try the Braised Beef Tenderloins

Nothing seems able to stop the push higher… not surging cases of the virus nor new strains of the virus, not new lockdowns around the world, not the 10 yr treasury piercing 1% for the first time in months, not some weakening US economic data, not even a failed coup attempt in the US nor any of the political turmoil (think a second impeachment or a call for his resignation or talk of invoking the 25th amendment) even gave investors a reason to pause at all…

Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

View More By Greg Guenthner