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Japan Stocks Could Explode Higher


From the Buzz & Banter: Japanese stocks could lead global equities in the intermediate period immediately ahead.

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The bottoming process in Japan appears to be complete.

Japanese equities should re-engage and potentially even lead global equities in the intermediate period (two to three months) immediately ahead.

The first chart shows an intermediate-term trend model for the TOPIX (INDEXTYO:TOPIX). This model held perfectly at significant trend support. I think it is rolling towards an upside break.

Click to enlarge

The second chart shows the TOPIX with a long-term "greed-panic" model. The urge to sell has increased remarkably despite prices going sideways/higher over the last few weeks. This should be strongly supportive of higher prices.

Click to enlarge

The third chart shows the TOPIX with a very long-term trend model. Japanese stocks have held this trend perfectly so far. If the resistance line is broken, I think this could mark the end of the entire corrective phase in Japan (May 2013-February 2014), and identify the next meaningful rally of this ongoing cyclical bull market.

Click to enlarge

I am now overweight Japan.
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