Kulbir, I like the pullback buy (as I laid out in this trade idea) especially with the 200EMA on the weekly just below. The idea here is to prepare for a bounce "relief rally" trade and then see how much longer the long global equities play to the long side will continue if traders/investors ignore some of the major issues (debt!) within China.

W H.., I like your point. I think a bigger and longer-term story and certainly not a new one is the shadow banking: A 15-trillion dollar problem for China. The new rules for AMPs are set to go into effect in Q2 2019 and will be a test for Chinese investors. The FXI is a trade, a bounce from support that could retrace the recent sell-off. A relief rally that could play out into Nov. That's the trigger.

Thanks for your reply and helpful clarification. Policymakers seem to be signalling they would like to see a relief rally, which often carries more weight than anything else. Look forward to your next trade idea. Thx!

David, I agree, the risk is getting in too early as far as timing. And it's really a trade that's built around a relief rally/bounce. So rather than buying a potential support level, I am open to waiting for momentum to get me in through resistance as the sentiment shifts. Today's news with MU and the Chinese court injunction not putting in a new low in FXI was a fairly good sign.

David, I agree, the risk is getting in too early as far as timing. And it's really a trade that's built around a relief rally/bounce. So rather than buying a potential support level, I am open to waiting for momentum to get me in through resistance as the sentiment shifts. Today's news with MU and the Chinese court injunction not putting in a new low in FXI was a fairly good sign.

Rughee H.: Thank you for your clarification. I believe in China and the power of the Asian market. I am not smart enough to go for the relief rally, but I hope a long-term investment in China is in my future. The question is when. For now I am hedging with cash. I wish you luck in your investments. DLS

Hi Robert, that’s the challenge with a play that has a catalyst going into the mid-terms. For me, that rhetoric shift is the uncertainty. I think shorts in the meanwhile need to be nimble This is a play on a potential bounce on a tariff relief rally into year end. Longer-term, into 2019, I agree. It’s sketchy.

Thanks Christopher, I like your angle as well. I agree this can be played in a number of ways and the Kranshare ETF offers a great cross-section of exposure. Gold is definitely the currency of "goldtopia" and as a forex trader, it absolutely behaves like it. I think today with the rather unorthodox release from China's customs agency, showing that exports to the US have dropped is akin to the kind of shift I want to see to make the FXI start to stabilize: "China’s customs agency broke with protocol late on Monday, releasing first-half and June export data days ahead of schedule and giving a rare breakdown for shipments to the United States...The administration rarely releases country-specific export data ahead of the overall monthly trade data. It is scheduled to release China’s June imports and exports figures on July 13 as well as the exact value of the country’s trade with its major trading partners, including the US. The preliminary release of the US number came ahead of the day Beijing and Washington are expected to impose tariffs on each other’s goods." Needless to say I like to the timing too.

With you in XAU/USD (although for other reasons).