someone brought up this nikkei chart to me last night, and told me it is close to seeing a strong reversal, after taking a deeper look into it, i will have to strongly agree with their statement.
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notice how the es chart has been going up for the last 189 days, while nikkei has been slumping for this same duration of time.
the indicator i use on all my trades is flashing a weekly buy signal right now for the first time since the covid crash on nikkei - see below the reaction it saw after this buy signal was triggered the last time around.
Hang Seng (Honk Kong Index) has the same weekly buy indicator, and it's also sitting at the 0.618 wave (2) target.
the theory is, since market maker doesn't want the market to just crash randomly - instead what they're going to do is rotate money into the next profitable area (slowly) - which in turn will create prolonged sideways chop \ a weak downward trend similar to what nikkei has been seeing over the last 6 months or so. not sure how long this is going to last, but i favor this scenario over a market crash any day - for the sake of the people, and for the sake of selling iron condors on spx 3 times a week 💸
curious to see how this will play out, but that's the primary scenario as of right now. if we happen to see a sharp correction as mentioned in my previous post, then i suppose we can invalidate the theory stated here.
also, a flat correction would greatly benefit the longer term bullish trend, as we would be able to build a very strong base up here, before the last push to 5000~6000 in the years ahead.
ps. if you wanted to try and catch some gains from the nikkei play, you could try picking up some december\january calls on EWJ - they've some very low iv right now, and it could work out very nicely as a hedge against our flat corrective phase.
Fantastic post Sir! A very interesting time in global markets. Corona-19 has shown us what a pandemic has the potential to do if it were any more serious than it already is, but it has indeed opened some market entry opportunities. I have one stock in mind I'm eager to get my hands on once the Covid 'Delta strain' fears have waned.
Eloquent
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@vvcv, Thank you. Which stock do you have in mind?
vvcv
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@Eloquent, Hey Eloquent... nothing too exciting, and I may be going against a bit of common sense (working on keeping objective). It is a long term investment opportunity I've been watching with C/Citigroup. I've noticed, during the past few years, that it has used this time to confidently put in a nice base (weekly chart). What has me curious, as for the chart, is the nice Impulse Wave starting around 4/2020 with what looks to be one of its shallowest ABC Correction Waves (6/21 - 7/20/21)
Other sources I found very curious is Citigroups' recent statement regarding its decision to start repurchasing its shares back. Along with one of the sectors highest dividend, a strong chart showing a strong foundation to launch from (from what I've seen), and the recent news all have me looking very closely. I must admit, I do tell myself every day that it is in 'that' sector.
I know you didn't ask for a couple of paragraphs :D.... but i thought i'd give a bit of a backstory for those that may be looking into the sector.
P.s. is the indicator you had in your NI225 weekly chart a ThinkorSwim indicator? I do use that platform, is it a default indicator? I don't use indicators at all, but it does look like a nice 'weekly' tool.