The S&P500 Vs. The Shanghai Stock Exchange Composite Index – May 2011

Starting on May 3, 2010 I have written posts concerning the notable divergence that has occurred between the S&P500 and Chinese (Shanghai Composite) stock markets.  Since that May post, the divergence has grown.

The chart below illustrates this divergence; it shows the S&P500 vs. the Shanghai Composite on a daily basis, LOG scale, since 2006:

(click on chart to enlarge image)(chart courtesy of

It is notable that the Shanghai Composite led the SPX (S&P500) significantly in late ’08 – early ’09, yet it has been stagnant- to-declining lately.

I continue to find this divergence between the S&P500 and  Shanghai Composite to be notable and disconcerting, on an “all things considered” basis.


The Special Note summarizes my overall thoughts about our economic situation

SPX at 1335.10 as this post is written