Nikkei: Short the top
Updated
The Nikkei is showing an interesting setup.
On one hand, there is a daily uptrend in place, but on the other hand, price is approaching the key area corresponding to the day when negative rates where announced by the Bank of Japan.
This daily candle was followed by a higher low, which is labeled on chart as a key level, and then a heavy decline.
As an interesting sidenote, this day's low and high match the extremes of the 'value area' in the volume profile, and the 50% level marks the monthly mode (regarding time spent at price) on chart for this whole range where price has been stuck since November 2015.
You could go long Nikkei (or some yen pairs, like for instance EURJPY), to ride this coming leg up in risk on, but the bigger trade might be the short side once this is done. Interestingly, the Dax is the worst performer as of late, and might be the best short candidate.
I'll update the chart with the short entry once we hit my target.
I added the tlt, gold and hyg charts on top, and the usdjpy, Dax and S&P500 charts as an overlay to the Nikkei so you can see the interplay between them.
The idea is to use the Nikkei and Yen as a barometer for the other instruments here, everything forms part of the same puzzle and we can crack the codes with some work on the patterns on chart, and knowledge of the fundamentals, news dates, and the price reaction associated to them.
Happy Easter,
Ivan Labrie.
On one hand, there is a daily uptrend in place, but on the other hand, price is approaching the key area corresponding to the day when negative rates where announced by the Bank of Japan.
This daily candle was followed by a higher low, which is labeled on chart as a key level, and then a heavy decline.
As an interesting sidenote, this day's low and high match the extremes of the 'value area' in the volume profile, and the 50% level marks the monthly mode (regarding time spent at price) on chart for this whole range where price has been stuck since November 2015.
You could go long Nikkei (or some yen pairs, like for instance EURJPY), to ride this coming leg up in risk on, but the bigger trade might be the short side once this is done. Interestingly, the Dax is the worst performer as of late, and might be the best short candidate.
I'll update the chart with the short entry once we hit my target.
I added the tlt, gold and hyg charts on top, and the usdjpy, Dax and S&P500 charts as an overlay to the Nikkei so you can see the interplay between them.
The idea is to use the Nikkei and Yen as a barometer for the other instruments here, everything forms part of the same puzzle and we can crack the codes with some work on the patterns on chart, and knowledge of the fundamentals, news dates, and the price reaction associated to them.
Happy Easter,
Ivan Labrie.
Note
Failure at the mode and a break down is very bearish. Wonder if S&P500 will follow suit anytime soon.Note
Good downside progress today, and it's starting to spill over into other markets, like the yen pairs, and US equities. I think we might have seen the swing high already, and we're heading lower, accross the board. Back to support.Note
The breakdown of the uptrend mode is serious, we're in for a massive correction accross the board, and the Nikkei fired first. Good leading indicator!Note
My estimated target has been hit.USDJPY broke the swing low and is facing low volume support, if it cuts through it it'll be a free fall.
Note
Free fall time, risk off sentiment unleashed. Expecting sharp fall in SPY to catch up next.Note
Hitting resistance between 17377-17500. The yen correction might end soon, or we might see some sideways action in yen pairs, until Nikkei is done retracing.Note
Looks like a short again, failed to break above the mode.
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