China to Lead US Into Bear Market: Traders

China appears likely to enter a bear market, which could drag down U.S. stocks, “Fast Money” traders said Wednesday.

Brian Kelley said the best way to play the China worries is via Australia, by shorting the Austrian dollar or the index.

“If you look at Australia, they’re so exposed to that commodity super-cycle coming out of China that once that stops, which it appears that it is, they’ve got some oversized banks there,” he said. “Their top four banks are five times the size of the U.S. banks, so you’ve really got to be concerned with that.”

Guy Adami of Drakon Capital said that China will affect the U.S. markets. “I think much of what goes on here in the last few years is predicated on the growth, or the perceived growth, in China. I think if you go back probably to ’07, they led us at well.”

A flat S&P won’t last, but it’s not likely to stay that way, Adami added.

“I think buying protection makes all the sense in the world, as does paring down some equity positions,” he said.

Trader disclosure: On Aug. 29, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Stephen Weiss is short VALE; Stephen Weiss is short TCK; Stephen Weiss is short X; Stephen Weiss is short AKS; Stephen Weiss is short AAPL PUTS; Stephen Weiss is long QCOM; Stephen Weiss is long JCP; Stephen Weiss is long JWN; Stephen Weiss is long CLNY; Stephen Weiss is long AMLP; Stephen Weiss is long AMTG; Stephen Weiss is long HK; Stephen Weiss is long WLP; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long STSI; Jon Najarian is long GLUU; Jon Najarian is long call spreads AAPL; Jon Najarian is long call spreads JPM; Jon Najarian is long call spreads GS; Jon Najarian is long call spreads SBUX ; Jon Najarian is long call spreads FB; Jon Najarian is long call spreads JOSB; Jon Najarian is long call spreads JOY;

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