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The Nikkei's Collapse: A 1987 Refresher
Last night's awe-full plunge in the Nikkei 225 may have come as a shock to many but it was right on cue if one believes in the past as a guide to the future. As ForexLive notes, the striking correlation between the current rampage in the Japanese stock market and that of 1987 is stunning. In 1987, the index had a remarkably smooth 89% rally that began in early November, lasted 186 days, and was followed by a 9.1% correction. Currently, the Nikkei 225 has had a remarkably smooth 85% rally that began in late October and has lasted 191 days culminating with last night's 9% correction. If past continues to be prologue, last night's wipe out should be entirely forgiven within three days and promptly forgotten (as a transitory blip). If, however, this time really is different, well...
One thing seems clear, for better or worse, a new volatility regime may have just begun in Japanese stocks - just as it did 6 weeks ago in Japanese bonds...
(h/t @ForexLive)
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Surely this will sweep across the pond to NYC
http://goldsilverbitcoin.com
Vol. in Nikkei ==> margin calls ==> gold/silver sales. All good however if 9% drop is erased in a few days. The race is on...
The markets these days will stay irrational longer than all will stay solvent. Money needs to be invested in the real world, in real tangible and useful ASSETS (these include water harvesting/storage, food and adequate shelter). The end game of FIAT heats up and partcipating in these market conditions is to a very large extent gambling. Manage your risk and your dependencies.
If there is interest rate volatility, then some of the contingent demands for money may be realized, leaving far less money available to be invested tangible outsets - except by those who deal in financial WMDs.
Sooo.... does this mean... Buy The Dip? ;)
dont those guys love volatility????
l1b3rty "Surely this will sweep across the pond to NYC."
"Surely you jest!" -- Bendover Bernanke (with a shit-eating grin on his wiskered face)
Don't call me Shirley!
We don't care about silly Japanese stocks here in Bernankistan!
No they're really fucked this time. Like REALLY
<--- Global Default the only way out
<--- Other
http://i.imgur.com/Qehok.jpg
They just don't make them like they used to.
Wait.........
Japanese debt to GDP was less than 70% in 1987. It is now well over 200%.
Gotta love that QE. Very effective.
have to wait for the market open tonight to see just how big the warning shot is.
is it a Quadrillion, how many zeros in there?
One quadrillion is: 1,000,000,000,000,000
Most Japanese debt is domestically held. Therefore one can also say that bonds outstanding to GDP was 70 and now is 200. Especially for bonds issued in a currency which is not quite "reserve-y" every obligation on one balance sheet is an asset on another balance sheet.
That is not to say that a high debt load my increase volatility.
rgds
Weekend
will plunge faster than 1987
According to the graph, we still have a few months left to party. Have another drink.
CNBC called this a needed and ecouraging market correction. Buy The Dip!
CNBC: "A market is crashing! Alright, just in time for May Sweeps!"
You ain't kiddin'!
They had more commercials 7:30-8:30 than content! 3 minutes of reporting, then 4 minutes of assinine commercials.
It's Lexus or LNG and their "orange dollar" drivel, or Comcast whoring the bandwith to pump local businesses and their own services.
Why would anyone even know that? Good little sheep. Keep following your masters.
Nikkei is in wave C up of wave (B).
Wave (C) down comes next.
We could see wave C of (B) head higher, but it's unlikely.
Shit, Dudley! Someon's messing up your zen! http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=logarithmic&chdeh=1&chfdeh=0&chdet=1369339200000&chddm=391&chls=IntervalBasedLine&cmpto=NYSEARCA:XIV&cmptdms=0&q=NYSEARCA:SPY&&fct=big&ei=y0SeUfjLLeWx0AG5fA
With the increase of derivatives since 2007 would it not be reasonable that things move faster with more range? Just askin....
Was their debt-to-GDP 250% in 1987?
No, that was PQ (pre-QE).
Black Monday here we come
Why's a bad day gotta be "black"?
"Dat's discimination!"
Will Native Americans demand that "in the red" be banned?
Uhm, 'Black' as in Night, In The Dark, No Light, Black Hole.
You rayciz! ;-)
Black or Monday, like any other term, is just a label
It's each individuals perspective and what they make of it that brings it meaning and therefore the power in the words
Because the predominant collective meaning of Black and Monday are negative doesn't mean that this is true. It is only the way it appears. Just like with an illusion.
Another Black Monday will be very good for me since I see through the illusion so my glass is half full not half empty. And my illusion and actions will individually defeat the current market illusion.
If enough of us do this together we will break the paradigm and create a new illusion and new market that can be based on some far greater semblance of reality. Many are so clueless (sheeple) that they won't even realize something has fundamentally changed. In the end its like a ride.
http://www.youtube.com/watch?v=cvz9uSK3zXo
Triple top. Hmmmm
The U. S. market is also showing a strong correlation to the buying climax resulting in the 1987 wipeout. See here:
http://stockmarketadvantage.com/alarming-chart-of-the-stock-markets-of-1987-and-2012-2013/
if we had a market, which we don't, then a correction might be possible, but it isn't, so we won't. can't happen here. [/sarc.]
I prefer 1932, but I'll take 1987.
My hedge into the BB Q&A was simply to massively short WTI at $96-97 a day or two before. Paid off.
What are you saying Tyler?
You saying that the Algos are tired from the bullshit as well!!!!
I say we increase the printing speed to 50000000000 PPM.
Yeah,but i doubt the algos will be able to handle all the Voltaire-ity in the Yen.
charts do not foretell the future
I've seen many charts on ZH that attempt to find a correlation with similar historical charts, suggesting a future outcome, but I don't think they ever work out.
again "no comment on the debt markets allowed."
Yet.
Great comment on another thread or site: Technical analysis is based on the assumption that all participants are operating with the intent to profit. That's why it doesn't work anymore, because actors who are influencing price are not necessarily seeking to profit, but to paint prices for other reasons.
What I'm saying is, I agree.
is this the next to last act, to levitate the markets while the jets and yachts are being readied?
That would explain this: http://www.cnbc.com/id/100758754
Today's correction is a temporary respite in the march upward. The money printing has not stopped, and all those new bills have to go somewhere.
http://dareconomics.wordpress.com/2013/05/23/around-the-globe-05-23-2013/
Looks a bit spurious to me....
I don't doubt that the Japanese experiment will end in tears, but I can personally find a few hundred charts that look at whole lot like a few hundred other charts if I pick my start and end points correctly.
Ask yourself this: Would you look at the chart presented above, draw the conclusion that somehow they are identical/similar, and THEN put your own money on it?
QED.
http://nipponmarketblog.wordpress.com/
So you are telling me to buy the Nikkei?
Donde esta el problemo? If only this were an accurate forecast of things to come, we could all hedge accordingly and ALL get rich. Right?
Larry Kudlow has thrown in the towel; he is saying "I was wrong, Bernanke was right."
Larry, Larry, Larry.
ebby - Larry knows who signs his checks.... and balances. Doesn't want to become a target for IRS or phone taps.
It's all about movement.
Big swings in the markets make the most money. These guys have million/billion dollar bets on either side of the trade.
A nice swing of 40% would make a tiddy profit or loss, depending on which side you were on. Most are hedged anyway.
The Nikkei has been up over 70% in about 7 months. In Bennyville, that same move would have put the S&P above 2100. You gotta expect that a few smart traders or computers are going to take profits. And with mounds of margin debt, sometimes a little selling cascades into a lot more. The Japan market will eventually find footing and reverse to forge ahead and the rampage will be on again. QE's are not ending this year or next. The S&P will top 2000 in the next 15 months.
We have a 1995-2000 situation where stocks were steadily accumulated and we got to the point where the last remaining buyers were bidding for less amounts of stock. This sparked a parabolic blowoff move. We have been in accumulation since 2009 and with share buy-backs, the amount of stock on the open market is shrinking. This is setting up a major blast higher as the last of the sideline money bids for less shares available. That is as long as Benny doesn't get struck by a lightening bolt of sanity and calls off the party before midnight.
3-3.75 B pomo today and they are having a hard time holding this market. No pomo til next Tues, of course.
ZH is a bunch of perma bear losers
Yeh... critical thinking can get one in trouble in a CB controlled market.