People are pretty worried about the current state of equity markets. Those whom are waiting on the side are also worried about whether they will get the right timing. In the case of the Nikkei-225, we are still far away from the best time to start reinvesting. We have seen a number of USA financial institutions fail. We have heard nothing from Japan. Their time will come. It will come in 2 forms:1. Financial institutions who have exposures as counterparties to foreign institutions
2. Financial institutions which have dodgy investment portfolios, that is they are holding bad positions on their books.
2. Financial institutions which have dodgy investment portfolios, that is they are holding bad positions on their books.
The best time to enter the Nikkei-225 will be when it reaches 11,000 pts. We are still at 12,482 pts, so that suggests a significant fall ahead. The 12,000 level is another important level, and the Nikkei has already rallied from that level, but I think it will be short-lived. I think it will exhaust itself by 12,500 pts. The reason I expect the 11,000 level to be achieved is because it has been a major support/resistance for the last 5 years. If that is broken, then we might be looking at 10,000pts. That is an even stronger support, but I dont see that being achieved. The outlook for Japan does not strike me as too bad relative to other markets.
-----------------------------------------Andrew Sheldon www.sheldonthinks.com
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