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The historical chart gives mixed signals as it is unclear if the rally from
the 98 lows is impulsive or corrective. A break of the Nov-Mar pivot lows
would be quite negative so I am watching that level carefully. Given the
failure to close above the 97 PH, there is scant evidence that the rally is
impulsive so the technicals suggest that the rally is corrective (probably
an A wave) and we can expect a smaller declining B wave and rising C wave
followed by a resumption of the trend down. While I don't deal deeply in
fundamentals, my general impression of Japan's economic situation suggests
that another 3-5 year decline does not have a high probability. The daily
chart is also less than clear to me other than the formation since the March
lows is clearly corrective (perhaps an ABCDE or a diagonal 5th wave in the A
wave decline). The overall broken wedge pattern is negative, however there
has been no follow through to downside. I am comfortable holding Japanese
assets until there is a major break in the Yen. Should the Mar-Nov lows give
way I would begin scaling back in spite of the positive technical outlook
for the Nikkei.
Earl
----- Original Message -----
From: Jeffrey Harteam <jharteam@xxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Sent: Saturday, May 08, 1999 11:34 AM
Subject: Re: MKT Nikkei
> 20,000 levels. By the way, Earl, could you please further clarify your
call on
> the Yen/Dollar? Do you mean USD/YEN? Regards.
>
> Have a good one
> Jeff Harteam
> Hong Kong
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