◆The Nikkei Stock Average is on track. On November 16th, the price rose to 33,614 yen, close to the post-bubble burst high of 33,772 yen set in June. The top price was suppressed at 33,488 yen in August and 33,634 yen in September, but it will be interesting to see if the price can break the “33-year high” again in the third time.
◆The reason for the rise in stock prices is the rise in US stocks such as the NY Dow. In the United States, economic indicators such as the Consumer Price Index (CPI) have been slowing down one after another, and long-term interest rates have fallen as there are growing expectations that the US Federal Reserve will halt interest rate hikes. Furthermore, business performance was strong, and the House and Senate passed a bill to extend the temporary budget, which was due on the 17th. As a result of these positive factors, the New York Dow rose to a high of $35,051 on the 15th, and is now eyeing the year-to-date high of $35,679 reached on August 1st.
◆As this happens, investor sentiment improves, and expectations for the December market and Christmas rally grow. Looking at the weekly Nikkei Stock Average, it underwent a four-and-a-half month adjustment from mid-June to the end of October, and has since recovered with a double bottom above the neckline of 30,000 yen. The weekly Rank Correlation Index (RCI) also shows that the 9-week and 13-week lines have bottomed out and are showing signs of reversal, and it can be said that it is only a matter of time before the stock surpasses the June high and moves up two levels.
◆However, the market price has skyrocketed in a short period of time due to a combination of favorable factors. Expect some adjustments in the near term. In the daily technical indicators, the RCI (9th, 13th, and 25th lines) is in the high range, and the psychological line is also at 8 wins and 4 losses. As introduced previously, prices rose from the October lows like last year and the year before, but in both cases, the highs occurred around Labor Day and the US Thanksgiving Day (November 23rd this year), and in late November. Adjustments were made from December to December. Taking these into account, I think it would be a good idea to basically “buy on the edge” for the next 1-2 weeks, and to be agile if it’s a short-term investment.
(Written on November 16th, next update scheduled for November 25th)
Information provided by: Takaya Tomita’s Chart Club
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