Its going to take more than Trumps game of golf with Prime Minister Abe and watching sumo wrestling to change the trend in the Nikkei. There are three important bearish features.
- The first is the break below the uptrend line.
- The second is the compression in the long term GMMA. This shows investors are losing confidence in the potential for the uptrend to continue.
- The third is the crossover of the long and short term GMMA at the value of the trend line.
This combination of features is very bearish. A break below historical support near 20800 would be final confirmation of the trend break and a continuation to test previous lows near 19200. As shown in December 2018, a fall below the support level could lead to a very rapid decline. Historical support near 19200 is relatively well established and traders will watch for consolidation to develop in this area.
Japan has much to lose in this US initiated trade war and the Nikkei is reflecting this concern. At least Sumo wrestlers play by the rules.
