China, Greece and the NYSE: Black Swans or Red Flags?

That pain came in the form of a 20% fall in the Shanghai Composite over two weeks. Even after the government cut interest rates and bank reserve requirements, halted trading on some stocks, required and participated in stock buybacks, the market fell another 3% on Monday and 6% after that. "Western traders sniffed panic and headed for the exits," Mauldin said.

And Mauldin doesn't believe the red ink is over yet. "Expect more volatility from China in the second half of this year and, really, for years to come," he warned.

When asked if he would invest in China at this point, he was not enthusiastic. "Probably not—at least until we see more signs of a bottom and Chinese buyers piling in again. China is a traders' market right now and will be for some time. The best you can do: Follow the momentum and get out quickly when it starts to fade. I think that longer term, China is going to be a fabulous market, but most people are just not going to be able to handle the volatility."

Dent credited the slowing of China and world trade in general to the collapse of industrial and energy commodities. A further collapse of China's economy and broader real estate bubble will be even more devastating ahead for oil, gold, iron ore and copper.

These are not isolated problems, Dent said. "China's bubble burst is much greater than Greece. However, Greece will be a trigger for a chain of defaults from Puerto Rico to Portugal to Illinois—and the first big one in the U.S., the frackers with a $1 trillion industry with over $600 billion in risky or leveraged loans due to default when oil gets back down near $40 or lower. I see $32 per barrel ($32/bbl) in oil in the next year or so and $10–20/bbl by 2023."

Dent recommended investors get out of all bubble assets: stocks, real estate, commodities and higher yield bonds. Get into cash or reliable cash flow positive investments. Wait for this unprecedented global bubble to burst—then the world is your oyster if you have cash. Cash was king in the Great Depression; it will be again in the next several years."

While it is easy to get distracted by Greece or China or the next trouble spot, he pointed to the Purchasing Managers Index (PMI), the indicator of operating orders in the manufacturing economy, as the main indicator to watch and right now it is not looking good for China, he said. The HSBC China Manufacturing PMI for China in June was 49.4, a sign that the sector is deteriorating. "90% of the time a negative PMI leads to falling commodity prices," Holmes said. Reduced manufacturing leads to less metal and energy demand.

Holmes is adjusting by keeping 15–20% of his funds in cash so when August comes, he can buy companies with strong balance sheets. "Right now airlines are doing well because of lower energy costs and healthcare is benefitting from Obamacare and an aging demographic."

Marin Katusa, author of "The Colder War," says recent changes highlight the problems in China, "which is critical to resources." Back in May, Katusa warned that the next Asian flu pandemic would be caused by the bursting of the Chinese stock market bubble. He credited the rise at least in part to the Shanghai-Hong Kong Stock Connect program, which spiked trading volumes on both indexes. "The beginnings of the Shanghai-Hong Kong Stock connect program caused a shopping spree by mainland Chinese investors inflating the market. In one year the Shenzhen Stock Exchange A shares' price to earnings ratio doubled to a 50 times valuation; over 2x higher than the NYSE composite index," he wrote. "The value between dual-listed Chinese stocks on the Shanghai and Hong Kong exchanges has become distorted. This is partially attributable to more international investors in Hong Kong markets, as well as to less restrictions on balancing the market with short sellers who put downward pressure on stock prices."