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Japanese Stocks Hit Bear Market
Joining its partner in economic destruction and currency devaluation (Argentina), Japanese stocks have just crossed over to the dark-side. After a glorious "well, the market is up, so everything must be great" rally of 85% in six months, the Nikkei 225 is now down over 20% from its highs - signifying a 'bear market'. This is the largest 10-day plunge in 27 months as volume has exploded on the downside. We wonder how the herds representing these five charts are feeling now? At the same time, JPY has broken back below 99 against the USD (and AUDJPY is at 5 month lows) as the entire JPY-funded rampage comes undone - seems like the message from the FX option market was spot on again. This is the lowest level in two months since Kuroda first spoke at the BoJ. Get that porta-potty ready, Abe... What next? Blame speculators? Short-sale ban? Shorting ban?
Initially sparked by a 5.0 earthquake - which was quickly saved - once the Japan's 30Y bond sale had passed (and ramped JGBs), equities started to fade rapidly... then the desperate defense of USDJPY 99 began (which sent JGBs lower)...
and then "it" happened... (just look at the two 250-300 point ramps that were tried to spark some momentum before it finally failed)...
From its highs at 16,020 on 5/22, the Nikkei 225 has now dropped 20% (12,815) - officially entering bear market territory. The low before it bounced was 12,810.
This is the first time near the 100DMA (green line) since the rally began...
leaving the Nikkei return (hedged for JPY) only 7.2% YTD... (and at three-month lows)...
It seems the BoJ has indeed lost control of the triumvirate of JPY, JGBs, and Stocks - as the latter now place each other in jeopardy at a higher and higher beta to JPY's swings.
Charts: Bloomberg
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Aren't they going to BTFD?
seems this was more a sell the rip...and watch em slip.
BTW Tylers - I'm a West coast guy so it's not so late for me...but last I checked it's reeeaaaaalllllly dark on the right coast. Japans perpetual pumping and dumping shouldn't cost you a nights sleep.
just wait until they get hit with a Panda market.
They're a broken people, gives me schadenfreud or whatever.
I do not understand why, in these circumstances, the Yen would appreciate versus the dollar? (Which has been a barely discussed subtext of all such articles in the past week or so.)
Or have I got it backwards, and instead it is a matter of the dollar somehow depreciating against the Yen? Or maybe the dollar's depreciation is somehow causing all this?
It just seems that the consensus is that Japan's economy, one of the world's largest, is about to present us all with a picture perfect example of why we should not do what they have done, but somehow their currency is appreciating against the U.S. dollar. This just doesn't make sense to me.
Just the dollar? Or all other currencies, too?
Ben showed them that we have many more printing presses!! We can and will win this "kill the currency game!"
That actually makes sense.
The Tyler's got outsourced so it was normal slave wage hours
85% jump and they scream bloody murder on a 20% pullback?
Even a casual observer can see this is an economy in the last throes of life. Anything but natural market forces reflected in that chart. Proves once again that men will go to their graves before they'll admit they were and are wrong about their precious theories. Abe and the BOJ will commit Hari Kari before they'll give up trying to prove their economic theories are correct.
SEE THIS KRUGMAN??!! YES, YOU HAVE WASTED YOUR ENTIRE LIFE LEARNING AN ECONOMIC SYSTEM WHICH IS FLAWED AT ITS VERY CORE.
Paul Krugman responds:
All this tells us is Abe didn't spend enough and Kuroda isn't printing enough. I predicted this, everyone else got it wrong.
Thats absolutely right. He's been saying that for ever and will continue to do so. No skin off his back.....
Ahh but they do love their theories. It allows them to view the world and people through a private prism of "truth" that allows them to feel elite. They will stay blinded and grow more defensive than ever else feel like mere plebes
2nd biggest market trading little a small-cap. the last 2 times japan had this scale of intraday volatility (high minus low over last) were the earthquake and LEH. BULLISH!
prepare for 2nd, 5th, 9th derivative effects - bail-outs and bail-ins simultaneously to save the profligate and torture the average
That makes at least 8 bear markets since the top and each prior to this resulted in a lower low on the Nikkei...if pattern repeats Nikkei 5K hats should be all the rage in Tokyo this fall. It must just be a matter of will....couldn't be they've got the wrong prescription going on 25yrs since the peak in '89. Glad to know we aren't doing anything similar to those crazy BOJ guys!!!
They are blaming HFT.
Meh that's nothing, the Nikkei was once at 40k... those who bought and kept their stocks waiting for them to go back up... well it's been 18 years now...
While a mob of ``Obama sons`` are running wild (beating up a 66 years old) and not getting charged with any crimes for it...
http://link.brightcove.com/services/player/bcpid1683042674001?bckey=AQ~~...
That wasn't a beating. That was just some youts peaceably expressing their outrage at hundreds of years of oppression.
Get with the program. The latest ZH policy on political correctness should help. Remember: certain select ethnic, racial, and religious groups ARE more equal than others.
Not far from where I live. What you're seeing there is the result of decades of intentional, politically motivated, dumbing down of the socially dependent masses. It is a system that has been put in place by both political parties for the sole purpose of keeping the gravy train running for the political elite. Keep them stupid, keep them dependent on social programs, keep them voting for what has become a generational belief in the right and sanctity of entitlements, for doing nothing more than having the ability to turn oxygen into carbon dioxide by simply taking a breath.
If you attend a school in the city of Buffalo your chance of graduating is just north of 50%. We could do better by just not giving a shit. You can only do this badly if it's intentional.
JUST PRINT A LITTLE MOOOOOOOAAAR!!!!!!!!!!!!!!!!
Citizens: report to reflation indoctrination camp after curfew.
Volume on Mt Gox should be high today : )
http://goldsilverbitcoin.com
?1 ~= 4 Ag Maple Leafs
Sorry that ? should be a Bitcoin symbol.
ANY REASON EURO STOCKS ARE NOT TRADING???
Apparently all NYSE Euronext stocks, ETF's, bonds, etc are not trading...they are "investigating"???
Let's try negative interest rates and zero margin and see what happens.
That'll force those treasonous investors sitting on the sidelines to invest in our precious stock market! Be a patriot! Gamble your money in the stock market lottery!
20 percent loss is huge. BUT, it is up 85 percent over the last six months. I'm no fan of manipulated "markets". But this kind of performance in gold from my perspective would be a chance to BTFD... Wake me when it reverses the entire 85 percent gain its had over the last six months. Likewise, when the DOW is 10,000. Until then the CB games are still afoot...
Up to now, every bear market that has ever happened on the Nikkei has turned into a bull market.
Bullish!
A traveling circus is more financially stable and socially respectful than these global trading pits.
FUCKASHIT!
Nikkei has about 4500 more points to drop.
Ban Central Banking. End the FED.
(Golly Gomer. I got a snorgtees tits an ass teenie upon this posting. End the F'n FED yeeeehaaaa.)
I know, they can just ban selling period. And maybe even just shutoff the markets and display a big green number 3 city blocks long in the middle of radiated Tokyo everyday.
End the FED
End the FED
End the FED
End the FED
End the FED
I can hear Cramer and all the Cheerleaders now:
"We all knew it was due for a correction. This consolidation will strengthen the base for the next leg up. You know it's true because look how frantic and excited I am about it. Furthermore, I'm rich, famous, and on TV, so I must know what I'm talking about."
market is no longer a discount mechanism ...
Yes.... you and all keynesians are really confused by this concept. When people lose trust in the market and more importantly currency. They unwind EVERYTHING. This causes deflation....not inflation
Yes this is Japan 101 better learn it now because it is an eventuality in the rest of the world as well
Actually Japanese stocks hit bear market in 1990-91 and have been in that same bear market since:
http://is.gd/mu06du
One has a distinct sense that policy makers in Japan are very close to panic mode.
Even PKO-action to try to support the equity market here would be counter-productive, as it it would broadcast the loss of control even further and even wider.
As simple as it may seem, the only thing Japanese authorities have left to rely on in the very short term is simple mean reversion.....
We would not be surprised to see a quick short-covering sprint back up to 14k on the N225, after which another roll-over is more than likely.
http://nipponmarketblog.wordpress.com/