'IS it a dead cat and does it know how to bounce?' is the question on investors' minds this week. They must be puzzled about the market's behaviour and wondering if there has been a reversal of the latest down-draft. This is a particularly relevant question for the H shares which have rebounded almost 10 per cent from last week's lows and red chips which are surging ahead. In the case of H shares our view is: unless you are a nimble trader they are best avoided for now. While the latest sweeping economic reforms in China are clearly medium and long-term positive they are definitively an unknown in the short term. There will surely be some corporate bloodletting until the current overhaul of the economic system is complete in China. We will not be able to see the results of this overhaul until early 1996 at best so we can not see great reasons to buy H shares until then. In addition to favourite counters, Shanghai Petrochemical and Yizheng Chemical are in an industry where product prices are in a continual slide after a major collapse. World petrochemical prices began falling in June and are still falling today. The huge Chinese market, a key factor in world pricing, is saturated with stocks of various items and this is exacerbating the situation. As these two counters' earnings for the next one to two years are now difficult to estimate these shares are better left to others. The only 'H' counter that might merit a buy today is Luoyang Glass. The company is well managed and trades at a real discount to other fellow H shares. A buyer with a six-month view of this counter will do well. We still recommend that investors pay careful attention to the red chips which are somewhat insulated from the China scene. Portfolio member Wing Shan International which has been one of our dogs to date looks dirt cheap and now that the company is buying its own shares could be worth adding to one's portfolio. As for the whole market we are still blase. There is no reason for it to trade above 10,000 nor is there reason for it to trade below 9,200. If you are so inclined we suggest you trade the market by buying blue chips or their warrants to play the rallies. However this activity requires that you pay very close attention to the market. Otherwise watch some second liners which are having phenomenal runs, often regardless of fundamentals. Shares like Florens, Pearl Oriental and QPL have made investors small fortunes so far this year. New counters to look at in this respect include Lucky Man and Ideal Pacific. In other action this week we were not at all surprised by Hopewell's announcement that it will sell some of its assets to reduce its gearing. In early October we wrote that fund raising of some sort was an absolute must for the company. Frankly we are still not buyers of this counter even with this announcement and its 30 per cent drop in recent weeks. The proposed sales of portions of the Bangkok elevated road and rail project and a part of the Guangdong Superhighway is easy to announce. We remain sceptics until we see the quality of disclosure following the sales. In portfolio action this week we do nothing. It may be winter but this investor has the summer doldrums. There will be no column next week.