How far can the divergence between Shanghai and the S&P 500 continue? The Shanghai Composite keeps deteriorating and lagging behind the S&P 500. I thought all the growth was in China and not the US! It is looking more and more like the Chinese stock bubble in 2007 is playing out like the Nasdaq in 2000. You have a Chinese real estate bubble now which follows its stock market bubble, like you had in the US. The thing about real estate bubbles is that they go on longer than stock market bubbles and the peak can last longer. Stock markets are quicker to act on fundamentals.
As for the markets now, it seems like low volume trading, with a lack of interest by all parties. I am a bit surprised that after such a big drop in commodities, the bulls are as steadfast as ever in that space. I believe strongly that stocks will outperform commodities over the rest of this year.
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