Nikkei 225: Breaking Out into New Secular Bull Market?

Nikkei 225: Potential breakout into a secular bull market


Source: Bank of America Merrill Lynch

 

 

We continue to favor Japan’s Nikkei 225. The Nikkei 225 is pushing above the 2007 high of 18,300, which has the potential to end the secular bear market for Japan that began in 1989. This is a focus chart in our 2015 Year Ahead and our February Monthly Chart Portfolio. A sustained breakout above 18,300 would confirm a secular double bottom for the Nikkei 225 off the 2003 and 2008/2009 lows and point to longer-term upside toward 28,000-30,000. Resistances come in at 20,900-21,575 and 22,750 (mid 1996 peak). Key 2015 support for the Nikkei is 16,700-16,300 with the October and April 2014 lows additional support at 14,530-13,885 (Chart 1). Nikkei 225 shows a base even when priced in USD Given the recent weakness of Japanese Yen, the Nikkei 225 has lagged and has yet not broken out above the May 2013 peak in USD terms. However, the big picture base or bottom is intact for the Nikkei regardless of whether it is priced in Japanese Yen or US Dollars. The potential is for a big breakout the Nikkei 225 in both JPY and USD (Exhibit 1). New highs for A-D line confirm the highs in the Nikkei 225 The strength in the Nikkei 225 advance-decline (A-D) line reflects strong breadth within the Nikkei 225 and supports the case for sustained breakout above 18,300 and continued upside for Japan’s equity market (Exhibit 2).

Category: Markets, Technical Analysis

Fed Gives Congress Room to Shirk Resposibility

One of my favorite thought experiments is the careful-what-you-wish-for scenario. I was reminded of its utility during Federal Reserve chief Janet Yellen’s Congressional testimony the other day. Consider the critique of the Fed by some members of Congress. As the New York Times described it, the three-hour hearing was “testy” as “Republicans on the House Financial…Read More

Category: Bailouts, Politics, Really, really bad calls, Taxes and Policy

10 Thursday AM Reads

I can tell you one thing: It’s good not to have a job that requires annual testimony in front of idiots. Selecting 10 bulleted morning train reads is much less stressful: • Can stocks rise in spite of weak earnings growth? (SKrisiloff) • What is Google’s Market Share for Search? (Priceonomics) see also YouTube: 1 Billion Viewers, No Profit…Read More

Category: Financial Press

TDS: Better Call Foul

The Daily ShowDaily Show Full Episodes,  More Daily Show Videos,  Comedy Central Full Episodes

Category: Financial Press, Humor, Television, Weekend

The Global Trade Slowdown: Cyclical or Structural?

Category: Economy, Think Tank

Empathy, Neurochemistry, and the Dramatic Arc

Narratives — specifically, the classic dramatic arc as outlined by German playwright Gustav Freytag — can evoke powerful responses, leading the brain to release the neurochemicals cortisol and oxytocin.

 

Paul Zak: Empathy, Neurochemistry, and the Dramatic Arc

 

Read More

Category: Psychology, Science, Video

ISIS May Be Losing a Lifeline

Source: Washington Post

Category: Digital Media, Politics, War/Defense

Wal-Mart’s Plan to Boost Pay, State by State

Regarding yesterday’s discussion on Wal-Mart’s pay raise, check out this informative map from the WSJ:     Source: WSJ

Category: Corporate Management, Wages & Income

Youth Labor Force Participation Falls, but with Good Reason

Labor Force Participation Rate: 1955-2014 Labor Force Participation Rate Labor Force Participation Rate In School to Population Ratio: 16-24 NEET to Population Ratio: 16-24 Source: Federal Reserve Bank of St. Louis

Category: Digital Media, Employment

10 Wednesday AM Reads

This morning’s train reads were prepared with a heavy heart, but no worries, we still have you covered: • The Nasdaq is doing the most bullish thing a market can do (MarketWatch) but see As FTSE Hits a 15 year Record, Beneath the Surface . . . (Moneybeat) • Climbing the Great Wall of Worry in China (Market Anthropology) • The…Read More

Category: Financial Press