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Chris Kimble: Time to Short Japans Nikkei Index ... Again?

July 29, 2013

by Doug Short

This morning Chris Kimble sent me an email with the following observation:

Back on May 24th the Power of the Pattern suggested shorting Japan's Nikkei index due to it hitting a 20-year falling resistance line. The Nikkei declined almost 20% in a couple of weeks, after it hit this line and then hit the 50% Fibonacci support line and bounced back towards resistance.

His email included a link to his Friday "Talk Your Book" interview with Phil Pearlman, the executive editor of StockTwits. We learn Chris's rationale for shorting the Nikkei via the leveraged inverse ETF ticker EWV.

For some context, here are Chris's three most recent charts of the Nikkei 225 that I've featured on this website:

Posted May 13th (see post)

Posted May 23rd (see post)

Posted June 7th (see post)

At one point in his interview, Chris mentions a Fibonacci pattern in the Nikkei. For the past three weekends I've been featuring a Fibonacci overlay on the Nikkei as part of my world markets weekend update. Here's the most recent:

Note that chart above goes through Friday's close. Today the index closed at at 13,661.13, down another jaw-dropping 3.32%.

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