Australia's swift rate cut saved the day for Asia but Europe still got its woes dragging on markets. So what's the outlook for us today in the U.S.? Looking for clues from index futures isn't much of a help. While the S&P500 futures point to a higher open NASDAQ futures go the other way around. When I look at China ADRs, first thing hits me on my morning screen is this: Chinese companies listed in American exchanges are oversold to a point where they can only come back. Looking at moving averages, there is not a single Chinese stock that is above 20 day moving averages (DMA) not to mention above 50 DMA or 200 DMA.

Steep losses right at the open. The DJIA is down 242 points in the first 15 minutes of trading. Europe and Asia was not any better either. Hong Kong's Hang Seng closed below the 17,000 level not seen since 2006. These losses are attributed to the plunge in the Dow on Friday. So it looks as if the downward spiral has started.

It's 11:00 A.M. on Monday and is a good time to take a deep breath and see what lays ahead today's trading for Chinese ADRs. For starters, energy pulled the broad Hang Seng Index up 1.6% after Friday's record 9.2% rally. Petrochina (PTR) had a strong showing closing 5.1% higher on the back of strong oil. So today's gain of $2.44 on the NYSE comes as no surprise. Aluminum Corp. of China (ACH) is strong today on news that the company is not considering cutting additional production despite low aluminum prices.

Chinese ADRs are trading mixed today with Baidu.com (BIDU) taking the lead and Sohu.com (SOHU) taking a beating. Easing oil prices helped spur the DJIA to 11,315.00 points by 1:00 P.M. Lowering demand for the black gold became obvious today when statistics showed that U.S. drivers drove 3.5% less miles than last year, the biggest ever drop for the measure during the busy summer holiday season. Customs data showed that demand for oil dropped by 891,000 barrels in June vs. May, a sign that high price of oil is unsustainable. Many expect crude to come back to the $100 level within reasonable time. The greenback strengthened against both the Euro and the yen, adding fuel for the slide in the oil price. Looking at the U.S. listed Chinese stock universe, Baidu.com is shining the brightest today so far. China's premium search engine company is up $4.06 or 1.21% by 1:00 P.M., continuing a rally that seems to have no end. The price of the stock is up 17.8% since June 23 (chart here) when the company announced better then expected second quarter results plus a positive guidance for the upcoming quarter.

We took the risk to say a month ago that “we think Chinese equities are nearing the bottom. Looking at Asia and China in particular, we find both macro and micro economic data to fuel our optimism. “ Since then the China ADR Index (CAI) rallied 7.5% in line with the Hang Seng’s 7.0% comeback, outshining the Shanghai Composite’s modest 3.7% rally. Have Chinese equities bottomed out?

U.S. listed Chinese stocks came back strongly by the end of the day, NYSE names in particular. China Mobile (CHL), China's largest mobile operator came back especially strong by gaining $2.67 or 3.75 percent on Friday to finish at $77.39. Some of the institutional investors made use of the opportunity to pick up good quality stocks.

U.S. listed Chinese ADRs plunged on Thursday, suffering their worst two-day fall. As the following table shows, the "China ADR Index" (CAI) is down by -12.28% year-to-date (YTD), the "China NYSE Index" (CYI) is down by -11.95% YTD, and the "China NASDAQ Index" (CQI) is down by -21.0% YTD. These indices are market cap weighted and are set at 1,000 as of January 1, 2008.

Chinese companies have gone a long way. Table of top ten companies by market capitalization has a surprise: five of them are from China! Exxon Mobile is followed by PetroChina... Impact of Chinese companies on the Hong Kong and Shanghai Stock Exchanges.

I had a chance to make a presentation about the tremedous opportunity Chinese stocks or ADRs represents to U.S. investors in front of the Oxford Investment Club.

We are bullish on Chinese stocks. It seems to us however that average American investors got a distaste of China after the 9 percent plunge in Shanghai on February 26 that sent global equity markets south. As a result, March has been a very quiet month for us, stock researchers, while this was the time stock research would have been needed the most. We will get back to this later.

While the premise of this article may be surprising to many, e.g. investing in China has never been more secure, the emergence of the Chinese markets is real, and recent events strongly support this premise. Who could have predicted only a short time ago that the IPO of the Industrial and Commercial Bank of China (ICBC) on October 27 would draw a record- breaking demand for a public offering?

Even though China’s economy continues to boom, to transform that into the green in our own pocket, is a different story. Investors have to remember that not economic growth but corporate earnings are driving stock prices. For the most part, of course. In addition to current earnings, seasoned analysts have to be able to differentiate between high– and low-quality earnings.

A fierce battle has been accelerating for a niche in China’s banking industry in the face of China’s preparation to completely open doors of its banking industry. Foreign banks have been staking out strategic alliances in China, hoping to be well-positioned for the eventual full opening of the industry just one year and three months ahead. Chinese welcome this competition and look at it as an opportunity to bolster their capital and improve management.