Stocks that are oversold big time and thus are ready for comeack today are ACH, HNP, CEA and YZC. Plus shares of Chinese fixed-line operators China Telecom Corp. and China Netcom Group Corp. gained for a second session in Hong Kong Tuesday on expectations they could soon receive third-generation cellular licenses. So that rally is not technical but fundamental in nature so don't try to find it on this screen. Still, CHA and CN are about to cheer investors to day, too.

I've talked to a number of people regarding current drop in Chinese ADRs and my feeling is that we are near the lows. For tomorrow, I agree with the Reuters commentator about prespects for the Hong Kong Stock Exchange but overall I think Chinese ADRs are going to change course and head back north.

I have a feeling that way too many investors don't understand how much Wall Street influences China ADR prices. Many say "I don't understand what U.S. subprime problem's got to do with China Mobile" They are right in their own turf but as the following two charts demonstrate, Wall Street has a tremendous impact on Hong Kong trading. On the contrary, Hong Kong trading has a negligible impact on the Street. And as you may know, China ADRs trading on U.S. exchanges follow Hong Kong prices. So you really should look into what moves Hong Kong.

Regarding the current plunge, we have to live with market volatility as was addressed in the "Strong stomach needed" article in the August 2007 Newsletter. So for me, Chinese shares shine when U.S. related news drag them down. They say: BUY NOW.

China stocks post biggest weekly loss in a decade: China's main stock index closed Friday with a weekly loss of 8 percent, its biggest weekly drop since May 1997. Chinese ADR portfolio was just as bad with no clear indication where the bottom is. Look up from the table below how your Chinese stocks did.

I have been following Chinese ADRs (U.S. listed Chinese companies) for a long time to realize a change in the dynamics of new IPOs. Investors have to be very selective when it comes to Chines IPOs, especially that high quality Chinese companies seems to choose Hong Kong and Shanghai lately.

China computer game developers have been working for foreign game developers to make a living for a long time. However, several years of hard working and accumulated know-how eventually brought about a significant change. Numerous domestic developers have started to spring out based on self-innovation. In-house, self-developed games already account for 64.8% market share of the Chinese online game industry.

Days like this offer great trading opportunity for the intelligent investor. For one, U.S. markets are shaky and for two, Beijing has told asset managers preparing to launch overseas stock investment funds to cut their exposure to Hong Kong. Bad combination for the market but great for the smart trader.