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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: Larry E Smith who wrote (902)	4/14/1998 11:56:00 PM
From: fut_trade	Read Replies (1) \| Respond to of 3902

Well, perhaps Japan's at the bottom. But until trading volume picks up and we have a clear reversal, I can wait.

To: Larry E Smith who wrote (902)	4/15/1998 1:02:00 AM
From: ahhaha	Respond to of 3902

Selling doesn't cause prices to drop. Rational expectations cause the drop. Those expectations cause orders below to be pulled and creates an illiquid market condition. You can also have booked orders below insufficient to handle marginal selling, so prices drop regardless of expectations. Nonetheless, expectations can cause prices to rise instantaneously back up. The issue is what the best knowledge expects something is worth, not what equilibrates marginal demand and supply. The best news you could hear is that fund managers are quitting the Japanese market. Haven't you heard of the Theory of Contrary Opinion? More importantly the BOJ has told you that they will be inflating stock prices. Didn't hear that? Then what will the BOJ do with the piles of yen they're accumulating? Keep them as book entry for the inevitable dollar defense fund? Or will they become added to the monetary base? If the latter, even to a small degree, then since expenditures of plant and equipment through C&I loans seem doubtful, those funds will be factored into the NIKKEI. When your investment has doubled, remember to get out fast.