Nikkei Stock Index: 1989-2018 Review

 

The Nikkei is a prime example what a real bear market can look like when demographic shifts are involved. This bear market always gave me trouble, so I had multiple alternatives to try, or should I say, “forced to try”!  This time I looked at the wave positions as one giant triangle, with the potential of coming up to the “D” wave in Primary degree. The mood between a “B”, “D”,  Diagonal 1, or an Impulsive wave 1 in a bull market, are next to impossiable to tell apart.

Any asset class on this planet that goes up has a bullish mood to it.  The best way to tell them apart is by the pattern it is making in gettting  there.

There is a high probability, an “E” wave in Primary degree is coming,  which would push the Nikkei to new record lows. This low would also be building a huge bottom base ending in 2022, along with all other world markets. Even if the 2009 bottom is the Cycle degree wave 4 bottom, we would still need a hefty correction between a 60% and 80% net retracement. Every stock index will join the bearish party, as the Nikkei will not stand up to the bears. 2008-2009 is a prime example of how many asset classes crashed together, so I expect it can happen again.

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