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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 668.73

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Nov 24 4:00 PM EST

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To: James F. Hopkins who wrote (1725)	12/14/1998 3:22:00 PM
From: John Pitera	Read Replies (2) of 99985

Japanese Mkt has formed very bearish chart pattern, if you look at a Chart of the Nikkei Dow from its bull mkt top of over 39000 on Dec 31st of 1989 to today it held at a support zone of 14500 to 15000 on 4 occassion, once in 1992, again in 1995, in the fall of 1997 and then in early 1998. The Nikkei finally broke this 6 year support line in the Aug-Oct 1998 selloff down to 13300 on Oct 8th, then the Nikkei rallied back to test the support zone and got up to 15100 on Nov 23rd of this year. The Nikkei has now hit that overhead resistance zone and has traded down 14100. In the bigger picture this break down on the chart, and the continuing depression in Japan could translate into another downleg in the Nikkei that could ultimately go as low as 10,000 or even 8000, That would not occur until 2001 or so. It is hard to conceive that the Japanese mkt could have this much weakness left but that is a potential scenario. Time will tell, let's hope their market does not do this as it would probably happen only if the US and Europe endured a 30-40% bear market as well. Food for Thought, John

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