Weekly appointment with the most followed charts in the world.
In early March we chose the Nikkei 225 as Chart of the Week to build a bearish case. The overextension on the MA200W had just set a new all-time record at 57.39%, and we wrote that the return below 50% was not a matter of “if” but “when”.
We also wrote something else: once the excesses are exhausted and the overextension falls back below 50%, the index has historically resumed its rise. We called it “the most important trading window”.
That window is opening now.
The Nikkei 225 closed this week at 53,123.49. From the record close at 58,850.27 the index has dropped 14.08% to its low at 50,558.91, completing the first leg of the correction we had anticipated.
Let’s see what the charts are telling us.
