The Nikkei initially fell during the course of the week, but found the
¥15,000 level to be supportive enough to push the market higher. We
broke above the ¥15,200 level, an area that we had pointed out as
resistance previously. Because of this, we feel that the Nikkei is going
to continue to go higher given enough time, and the fact that the Bank
of Japan is flooding the market with liquidity doesn’t exactly hurt that
argument either. After all, there will be no real yields coming out of
the Japanese Government Bonds, so it forces money into the Nikkei
itself. On top of that, as long as the US numbers are starting to
improve, that is good for the export market out of Japan.
We believe that this market will ultimately go to the ¥16,000 level in
the short term, followed by much higher levels in the longer term.
20,000 isn’t exactly a stretch of imagination, although it would take a
bit of time to get there obviously. Selling is not something that we are
comfortable with at the moment, therefore we are looking to buy and buy
only. Because of this, we can even look for shorter-term charts as
signals, such as the daily chart. We believe also that a move higher
will provide plenty of pullbacks for short-term traders to continue to
profit off of this market as well, giving us a steady bullish presence
in the Nikkei going forward as we continue the positive momentum.
