Profit from the fall of China’s stocks: The FXP

Think investing in American companies has been bad, its been beyond horrible with Chinese securities. Since their October highs, the Shanghai Composite (SSE) is down 52%, and the Hang Seng is down 28%, and you can make money from China's falling stocks by buying the UltraShort FTSE/Xinhua China 25 ProShares (AMEX:FXP).

The trend can't be ignored, yes the Olympics are almost here and plenty of analysts are talking that up as the next thing to move the market, but be realistic.

Investors -- disheartened by terrorist threats to the Games, summer power shortages, logistics nightmares, and factory closures in a bid for blue skies - are desperate for an Olympics honeymoon for stocks that could be just around the corner.

An upward jump in the market is possible partly because the Chinese index is among the worst-performing in the world this year, down some 45 percent.

The Olympics could send the index back above the 3,000 level, from current levels near 2,900. Whether the rally can be sustained, though, depends on Beijing's resolve in following through on much-needed reforms after the Games.

The market might benefit from a likely policy vacuum in the next month. Beijing probably won't introduce more tightening or any drastic reforms before the torch goes out, especially since President Hu Jintao recently stressed the need for economic stabilization to make sure the Games are a success.

Fellow Masters, this weekend look over the FXP and consider playing the odds on Chinese stocks.

UltraShort FTSE/Xinhua China 25 ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the FTSE/Xinhua China 25 Index.

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China, Current Market News, Market Commentary, Stocks to Watch