Week of May 16, 2008
Yellen’s comments yesterday are a fitting tribute to “last tries” activity. Essentially she said the Deflation direction is still in place and she is desperate. Market players took this to mean that Risk-On is back in vogue.
In my opinion, nothing could be further from the truth. In running scans through market price data we see a lot of correlation to the activity during the week of May 16, 2008, a week before the big swoon started when the S&P declined from the 1440 area to eventually 666 in March 2009. You might go back to our archives of May 2008 and catch up to what the story was at that point, especially the May 19, 2008 post.