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Nikkei Downtrend (1982-Present)

Posted By Barry Ritholtz On May 24, 2013 @ 12:30 pm In ETFs,Investing,Technical Analysis | Comments Disabled

click for ginormous chart
Nikkei 20 years [1]
Source: Kimble Charting [2]

 

Awesome chart from Chris Kimble [3] showing the Nikkei going back to 1982 — in particular, the downtrend that began in 1989 and still persists to this day.

Chris notes that Declines of 32% to 60% taken place at this level for the past 20 years!

One would normally expect a pullback and consolidation after a long move up to a major trendline, and under pre-Abenomics stimulus, that would be my highest probability outcome (pre-stimulus, I have no idea!).

The key here is if and when the Nikkei breaks through that trendline, it is likely the beginning of a longer term multi-year breakout. This is why we put on Japan exposure for clients much earlier this year.

 

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Disclosure: Clients are long GAL [4], DXJ [5], which have substantial exposure to Japan.


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URL to article: http://www.ritholtz.com/blog/2013/05/nikkei-downtrend-1982-present/

URLs in this post:

[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2013/05/Nikkei-20-years.jpg

[2] Kimble Charting: http://blog.kimblechartingsolutions.com/

[3] Chris Kimble: http://stocktwits.com/message/13758463

[4] GAL: https://www.spdrs.com/product/fund.seam?ticker=GAL

[5] DXJ: http://www.wisdomtree.com/etfs/fund-details.aspx?etfid=18

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