Nikkei

In my previous post on Nikkie (18^th September 2014) I wrote, “Nikkei played out exactly I have expected. It consolidated between 12500 to 1500 levels for more than a year. Nikkei, it has been in a 25-year long bear market. If we see the given chart Nikkie is trading at the upper end of the channel resistance. With yen breaking above 109 and expected to go up to 120+ levels, I think Nikkei will breakout and will enter a multiyear bull market”

Since then Nikkei moved up from 16000 to 21000 as JPY broke above 109 and moved up to 134 as expected in the post. Since then Nikkie consolidated between 15000 -21000 for more than two years and has broken out of the range. 

The arrow denotes the time when the buy call on Nikkei was given. 

If we look at the given quarterly chart of Nikkei, the break out of Nikkei looks more profound and it seems that finally, Japan has been able to move out of the bear market. 

The near term target for Nikkei is at 29000 and long term target could be as high as 40,000. Readers may remember that I first gave a buy call on Nikkei on 4^th may 2012 when it was trading at  9500 levels. 

US markets

In my previous post on SPX500 written on 22^nd February 2017,  I wrote the following  

  

1.)  SPX has negated the bearish doji in yearly chart which indicates very strong bullish momentum in the index

2.      The target for SPX will be ultimately at 3200 and unless SPX breaks below the support of the channel (yellow channel) this target should be achievable. 

The strong bullish momentum continued throughout the year and SPX is up by almost 14% since then. If we look at the current weekly chart for SPX500, the index has reached to a crucial resistance level of 2700. The index should face multiple resistance at these levels and it seems that a correction to 2400 – 2500 looks very likely. 

However, The long-term target for SPX stays at 3200 -3300 and index should resume its upward march after the brief pause which will be a good long-term buying opportunity. 

Summary:-

1.       Expect a 10 – 15% correction in SPX in next 6 months.

2.       Long-term target for SPX stays at 3200 - 3300

Bitcoin

Everyone talks about Bitcoin these days. I was just looking at the chart of Bitcoin and it looks like a perfect parabola. Generally, a perfect parabola is formed at the peak or bottom of the bull/bear market. 

This is not the first time Bitcoin is witnessing such parabolic rise. It had happened in 2014 -2015 when bitcoin moved up from sub 100 levels to 1127 and then fell to 200. 

Also, from the perspective of behavioural finance, when everyone starts talking about an asset it is generally a bubble.

Although, I do not have any fundamental view on Bitcoin, from my understanding of asset prices, it seems that Bitcoin is going to get interesting in coming days and it may not be pretty for many investors.