Sunday, January 13, 2013

Eastern promise?

The beauty of trend following is that, somewhere in the world, there can be trends that take off at any time. I've shown below a chart of the Japanese Nikkei 225 index, which as you can see has been in a pronounced, clean uptrend since the middle of November.

Traders and investors have tended to shun Japan as there has been a prolonged period of poor performance since the Nikkei peaked approaching the 40,000 level more than 20 years ago.

You can also see that on the following monthly chart, there appears to be a potential trend reversal setting up on this much longer timeframe.

No doubt trend followers who trade equities in the Japanese markets will have done very well recently, and the long-term picture also potentially indicates that this may continue for a while to come.

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