Nikkei 225 also has reversal potential

Hi again,

The Nikkei 225 has arrived at a potentially significant level at the same time as the S&P 500 ( see my previous post)

The rally since last August in the Japanese index has been in a 5 swing structure as shown on the chart above

When the 5th swing ends you often get a significant correction or reversal

With these 5 swing moves you can also use Fibbonacci projections to indicate levels for a potential end of the 5th swing.

We are now at a cluster of these Fib projections. They consist of 38.2% of 0/3 from 4; 161.8% of 3/4 from 4 and a 78.6% retracement of the last major down swing

As with the Gartley set up, you need to make a trend peak at this cluster level for it to be significant

Cheers

Ric

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
This entry was posted in Market, Shares, Stocks, Trading. Bookmark the permalink.

3 Responses to Nikkei 225 also has reversal potential

  1. DV says:

    I love this setup, I have been watching it since you posted your S&P trade that was stopped out… if you look at the weekly chart it looks like a gartley pattern, and the 100% target of the inverse head and shoulders pattern from March 09 and a key support resistance level, another trade I am going to take if a suitable rejection occurs

  2. DV says:

    Hi Ric, what are your thoughts on BHP on weekly chart, hitting key level with what looks like a bearish butterfly pattern in the CD leg of the upswing, which also appears to have a 3 drive pattern forming at the key level?? I am planning to take a position short trade off the weekly chart but waiting for the stochastic to cross back down or a DTOSC (stochastic RSI to give a short term sell signal at which time I will initiate a 1 bar trailing sell stop order into a short position.. Daily is a bit gappy for me so only going to enter on weekly chart… if it triggers short certainly wont be good for the XJO..

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