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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up?
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To: borb who wrote ()10/4/1998 6:24:00 PM
From: chirodoc  Read Replies (1) of 3902
 
Black hole still sucks
28th September: Thailand offers a ray of sunshine this week. A rally is underway. It is accompanied by good volume. However, the rest of the region does not yet offer signs of hopefulness. I doubt that Thailand can do it alone. If the Thai rally is not the start of something larger, I fear that the SET can get no higher than 300. (A failure at 300 is the scenario painted by the long term weekly chart pointing to 100 for that market. The neckline for that bearish pattern is around 300.) Thus the Thai rally is more likely a bit of a rebound on the long path down.
Is the rest of the region about to rally? The regional ASEAN fund that I follow gives a little hope.
And the current rally in Singapore could take the market to 990. But volume for Singapore was poor last week, reducing its chances. Philippines and Indonesia also have lower targets outstanding and no indication of a reversal.

Even the recent rally in Hongkong looks limited. The rise in the Hang Seng today is consistent with a head and shoulders top pointing down. Falling volume since the beginning of September is the key.

Why am I so pessimistic? The answer is Japan. It is unlikely that Asia is going to recover while Japan is still sinking. It is like a black hole, sucking down the rest of the region. And the Nikkei has given no indication of a reversal. It must be presumed that the Nikkei will fall to at least the logarithmic target of the large symmetrical triangle at 10,500 before there is a chance of a reversal. And the worst case scenario is somewhere around 6,000, next year.

In the meantime, the rally in Thailand offers an opportunity for a little short term gain.
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