A Hit Job in China

The controversial Barron's piece by Jonathan Lang over the weekend about BABA continues to provide for some pre-FOMC buzz this morning. The piece calls for BABA to basically drop 50% from current levels, amid other shots leveled at Jack Ma's firm, which is a creature of China's command economy. 

The stock is down over 3% as I write this, but has already fallen from $120 down to $58 over the last ten months--One has to wonder why this piece was not written when BABA was near $100. Still, if BABA is a bonafide accounting fraud then the piece will prove to have been prophetic. 

Also note BIDU, another prominent China internet name, is taking it on the chin this morning, too. 

But the larger point is that the action in BABA may as well be a metaphor for this market at-large before the big Fed meeting later this week. Risks continue to be elevated with rewards scattered, and even if you decided to call a contrarian bottom off the Barron's piece, you likely will have to endure pain in BABA first. 

Moreover, those traders accustomed to buyers every "false breakdown" with leverage, are finding out the hard this morning in the likes of NFLX that the market could easily be changing character, with that leader (exclusive of the BABA hit piece) continues to weaken below $100.