Flash Nikkei - Update following the terrible earthquake.

My deepest condolences to those who lost loved ones in this terrible tragedy. 


Nikkei monthly chart:

Nikkei index fell 6% directly to its Fibonacci retracement, the next support is ~9000 (Fibo), then previous 8800 ie Aug low (which happen to be the Bollinger lower band)


For what it is worth, in Jan 1995, when the Kobe earthquake happened, the market fell 16% in the next three months - which, applied to the Nikkei's Friday close, gives around 8600.

 

Nikkei weekly: It broke through the 50% retracement to test its Bollinger lower band & last Fibo. hence a strong support. If broken, the next support is the previous low (8800). The market is now oversold. Let's wait a few days and see if Nikkei overshoot.

Eurostoxx Weekly:

The chart is testing its 20 week moving average. 

The daily chart is oversold, it could overshoot 30 point lower (ie the next Fibo support).

Conclusion: I maintain the switch out of EM markets to Japan, Europe. The Nikkei's fall is an opportunity to buy, and Asia Pac ex Japan market resilience is an opportunity to sell. Timing wise, do the latter now, and wait for a signal to buy the former. What are those signals? Test of support level, reversal candles etcetc...

The overall bull market is intact.