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    Nikkei 225

March 10, 2024

Volatility Reports 3/11/2024 Nikkei Dow

A secular bull market for the Nikkei has been a long time coming

Excitement is well deserved by the new highs posted in the Nikkei averages. These new highs are a sign that Japan after decades is likely in a very long-term – secular – bull market. However, on a cyclical basis, a long term and intermediate term basis the Nikkei is putting in an important high.

Price and time fit the outlook that a final price high will be in place by the end of April 2024 or sooner (see post in group March 5, 2024.)
ProShares Ultra MSCI Japan seeks daily investment results (EZJ) two times (2x) the daily performance of the MSCI Japan Index®.

We saw it coming from the October 2023 trading range low (See October “Volatility Reports.) The most recent trend,  breakout, based on EWT can be labeled as post (after) triangle, which is a terminal move, not the beginning of a new trend of larger degree or proportion.

The Nikkei futures have a little more work to do finishing off an all time high pivot but the 2x ETF shown here can be seen as a completed up trend. Thus I am expecting the new runs higher by @NK not to be confirmed by the ETFs. As such a bearish divergence would give confidence that a tradable high is in place.

Text me on WhatsApp if you want real-time updates when they happen, 760-459-4681, actions speak louder and CT is not transaction hungry.

The first chart here shows the last four times TEM nailed a COT as panic buying or selling.

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August 7, 2022

Volatility Reports 8/8/22 Harbinger of Things to Come

“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” George Soros

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July 6, 2021

Volatility Reports 7/7/21 US Dollar

Demand for the USD from all corners of the world is expected to increase with economic opportunities created by Biden’s “Build it Back Better” plans.

Contrary Thinker is bullish on the buck since its double bottom in 2014. Along the way, I have pointed out that the Euro was a farce based on numerous sovereign nations forming a union because their proximity would not overcome their differences in culture and language and leadership. The central bank for the EU has its own QE issues to deal with and a lack of economic recovery hangover because of the austerity measures they took after the WFC. To date, they are still trying to catch up.

But that is the speculation behinds the bearish Euro bullish Dollar outlook. What is more important is what the market is saying.

The features three window screen grab shown here moves from left to right, long term monthly bar to intermediate-term weekly bar to short term daily bar.  The red shaded area is the sell-off into August of last year, reaching a panic extreme. When TEM hits Rule#1 like that, it calls for a flat, choppy period to follow. The proverbial dead cat bounce after a panic sell-off. When TEM hits rule#1, 90% of the time or better, expect a low to be in place, and the market builds a new base.

Like a panic top, it is a change of trend, and the emotional pain that short positions are in will give them the impetus to flip out of their positions. The emotional selling started at 94. Thus the market will move to this area now without much problem. Why now?

My volatility model – TEM – for both the weekly and daily bar have cycled to new extremes that suggest a trending move will pick up a following on the next breakout or MA crossover. The latter has happened on the weekly bar, and my AlphaTracking MA gave a standalone buy signal three weeks ago.

However, what is more, important is the S-T daily bar is on a fresh and leading TE#2, setting up the spring for a breakout. I have included the data window in the chart so traders can see the breakout levels. A move above 92.80 is bullish, and as stated above, a move to 94 should be easy.

While the relationship between Gold and the USD has typically and very publically been one of negative correlation, it is not a necessity. Furthermore, a strong dollar does not put the bash on commodity-based inflation. Regarding the latter, the demand for raw materials priced in dollars is not the same as monetary-based inflation, which all the gold bugs and inflationists can talk about.

Bottom line and current working positions and suggestions.

I am bearish on emerging growth markets, bearish on gold, bullish on inflation, bearish on the local stock indices, and bearish on bonds. I would call that right-hand tail risk.

CT is long the USDJPY since 01/27/2021 at 11:40 am and plan to add the longs in the current time frame.
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