Major corrective top could be in place at 42,555
My preferred count for the Nikkei 225 calls for a major decline in the coming years after a likely peak at 42,555.
As the chart above shows decline from the December 1989 peak at 38,950 to the 2003 low at 7,603 was a large wave (A) and wave (B) was an expanded flat where wave C of (B) extended to the 42,555 high. I do expect this was the the top of wave (B) and wave (C) lower to at least 6,791 should be under way.
A break below support at 30,518 will confirm the wave (B) has completed and wave (C) lower is unfolding.
What could possibly trigger a decline like that in the Japanese stock market? I think that the major coming "Black Swan" event, that will trigger a major sell-off in the global stock markets is going to be debt. In the forefront of public debt is Japan. With a debt-ratio over 200% to GDP and this debt burden has just got worse as a major sell-off in Japanese bonds has pushed rates higher to 3,16%.
Japan is not the only country with a huge debt-burden. After the Covid and all countries adding out of this world liquidity, which has pushed inflation higher world-wide. It looks like the global debt burden finally has reached a level, that no longer is manageable.
The unmanageable public debt will likely keep pushing rates higher globally and eventually turn the global stock markets lower from their peaks.
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