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Overnight, China reported the 1st contraction in their PMI survey since the survey has been available to analyze! As the facts change, I do. China was a long position I took against my short Japan (EWJ) position in July.

After this week's alarming Japanese economic data, I am much more comfortable being outright short Japan, than hedged with a qualitative catalyst, like China's upcoming Olympics.

China led Asian advancers overnight, closing up another +0.94% at 2939 on the Shanghai Index, which has equated to a +5.7% advance since July 1st, outperforming most major asset classes, globally, for the month.

Buy low, Sell High.
*Full Disclosure: I sold my FXI this morning into a strong open.
KM

(chart courtesy of stockcharts.com)