Shanghai Composite Hits Lowest Level Since May

China's Shanghai Composite index got walloped overnight - falling 6.7% - and reaching it's lowest levels since May, reports the Wall Street Journal.

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Could China be leading the broader markets down? I think it's very possible. China's been the posterchild of this monster rally - "Look everyone, China's doing OK!" And if China's not really doing so hot...uh oh!

In reality I think we've seen a lot of smoke and mirrors from a government desperate to keep the economy rolling. They've used enough forms of "economic steroids" to make a MLB slugger proud.

With Chinese stocks off nearly 25% since August 4th, I'd be very cautious right now about equities in general.

Related reading:

• How China Goosed Intel's Q2 Numbers
• Jim Rogers: I Would Not Be Buying Chinese Shares Right Now

Jim Rogers: I Would Not Be Buying Chinese Shares Right Now

Legendary investor and China bull Jim Rogers told Bloomberg that he hasn't bought any new Chinese stocks since November. He said they've risen too far, too fast, and that they will "probably collapse" at some point. Then, he'll buy more.

Rogers is investing in commodities in lieu of equities as a way to play the China story.


Here's a video of his interview on Bloomberg (click the Video tab to view)


Great comments from Jim, as always - he's fired up!

More recent insights from Rogers:

• Jim Rogers' new favorite country to invest in
• Why Rogers has covered all of his short positions