Chinese Microcap Basket Trade Update

Microcap Speculator submits:

Almost two months ago, I first wrote about an actively-traded basket of Chinese smallcaps, microcaps and even penny stocks. The China stock trade is currently the largest macro position in my portfolio, and it's off to a rocky start. The basket over all has treaded water, shifting between slightly-above breakeven to slightly below. However, that is largely because I aggressively sold positions as individual stocks spiked. Cashing in on quick, sharp spikes in stocks like AJGH.OB, CCME, XING offset the pall cast over Chinese smallcaps, especially those that involve a variable interest entity (VIE) or that came public via a reverse takeover (RTO).

But the macro rebound I thought would materialize just hasn't. Instead, as the Trading China blog describes: "sentiment couldn't be worse, most longs have been scared away, sitting on the sidelines, and shorts are looking for new trading ideas on a daily basis." Trading China sees both


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