Dollar Yen and the S&P500

S&P500 index


Back in Sep to Dec 2008, during the days of maximum panic, the stock indices such as the Down Jones and the S&P500 were tumbling due to selling from 'deleveraging' activities of the world's (former big names) investment banks, the money was flowing into the so called 'risk currencies' such as the USD and JPY, the currencies that had low interest rate yields, were all outperforming other asset classes. Hence there was an observable intermarket correlation between usdjpy, eurjpy and the stock indices. All fell in concert. Right now we can see a decoupling effect, with the stock indices falling further to new lows, while the usdjpy and eurjpy rising. What does this mean? Is the end nesr for the stock indices, or is it just the relationship has gone, or does it mean money is now flowing into precious metals such as gold or silver, which have sored this year? Well, I think we are very near the bottom for the US stock markets at least, but heck, we could be wrong, time will tell.