Published 30th November 2018

The stand-alone picture of the Nikkei 225 looks bullish. Especially the 3-wave drop from the early October high supports the black count. Moreover, the USD/JPY currency pair seems also bullish in favor of the dollar. This is often a tailwind indicator for the Japanese equities.

However, we concluded on our US equity indices outlook that the rebounds for the major American indices are likely to be subdued. Does this fit into the picture of a bullish Nikkei? It is most often a problem. The Nikkei could circumvent the problem by making a big move up early next week. Otherwise, it gets doubtful that Japan decouples from the rest of the developed world indices.

The best signs that the red count plays out after all is a straight and sharp rally. Pullbacks shouldn’t retrace more than 2.5% at this stage.

The analysis above is a historical abstract of our Nikkei 225 Premium Analysis. Subscribers can access multiple timeframes, which are not displayed on this page.