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Pastimes : The Philosophical Porch
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From: Rarebird11/21/2006 10:22:29 AM
   of 26251
 
Market Fragments:

The Nikkei 225 has been a leading indicator for turns in the US Stock market this year. It topped out in April one month before the US equity Market corrected in May/June. It also bottomed near the end of June weeks before the US equity market bottomed.

On Sunday/Monday, November 19-20, the Nikkei 225 broke down badly.

Here is a weekly chart of the Nikkei 225 Futures:

charts3.barchart.com

It appears that the current decline is just beginning. I'm looking at a retest of the June low and an outside chance of a retracement back to the 10,789 level.

I'm looking at the best way to short this market. One can short this market via the ETF (iShares MSCI Japan Index (EWJ)) or the Nikkei 225 Futures. However, the risk is that the rising yen will offset the fall in stock prices, so currency neutralization would be required to ensure that trade.

Profunds has an ultrashort mutual fund which trades 200% the inverse of the Nikkei 225 Futures (UKPIX):

stockcharts.com

Scroll down to the weekly chart.

I will need to check this statement out in the Profunds Prospectus before I commit any $$$ here:

"To the extent that UltraShort Japan Profund is invested in non-US Dollar denominated instruments, Profund advisors may employ strategies intended to minimize the impact of foreign currency fluctuations."

I have a few other questions too, which must be answered.
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