Ranking the Indices

Since the big drop on August 24, I would have to rank them as follows:

1. Europe.  Surprisingly Europe has shown the most strength even though Germany depends on China for many of its exports and heavy long hedge fund exposure.  Draghi's dovishness a bullish factor again.
2. US.  Not as strong as one would expect with the limited China exposure in US equities and the less bullish exposure among hedgies compared to Europe and Japan. 3. China/Emerging markets.   There are too many outflows and the fundamentals are too weak to support much of a bounce despite extreme bearish sentiment.
4. Japan.  Lots of China exposure, heavily long positioning among hedgies, and vulnerable with USDJPY weakness to continue with a dovish Fed coming soon.  Abe also less committed to his failed experiment.

If you are going to short, short the weakest, and get long the strongest.  Despite Europe being the strongest lately, I still prefer US over Europe for a bounce trade.