September 18, 2018

Nikkei in a Terminal Move

Thinking Man’s Trader Report

in your mailbox September 14, 2018

After the February spill, it was unclear if the Japanese stock averages had put I a clear peak and kicked off a cyclical correction like the Dow and S&P. TMT had deemed the advance from the 2009 low the beginning of a new secular bull market that would rival the big bull run from 1950 into 1989.

That very long-term underpinning explains why the early 2018 spill did not take an EWT five wave structure, which leads our advisory to an I-T 4,200-hundred-point opportunity.

The first pop-up chart on this page is the NK last week. The chart on the right shows a large – multi-month horizontal triangle. A pattern that is resolved by a high rate of change (HROC) trend when prices break out of it. The left- hade chart depicts the TEM model on the weekly bar that supports an HROC trend with its TE rule #2.

I have labeled the daily chart with a bullish wave count however the move can go either way. This bias is where forecasters take too much pride in opinion, and a strategist mentality is more important. A breakout in either direction from here should get follow through.

Tuesday, September 18, the Nikkei made it clear. In right-hand chart from today, the NK is up over 600 points with new highs a few hundred points to go.

The middle chart makes it clear what to expect after an intermediate-term event #2 from the Technical Event Model. The daily chart in the right-hand window shows TEM now into panic buying with %C at an extremely low and directionality at an extreme high.

What is of critical importance is the breakout here, just like the small-cap break out back in July, it is the end of a trend not the beginning of a new one.  Every chartist I read is bullish on all the sectors that lead that small-cap breakout, and this is where being a contrary thinker earns its business.

Once new highs are made by the NK, a decline will begin following the same pattern as the mini Russell and the Nasdaq 100.

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