Saturday, August 2, 2014

Weekly Market Reivew N225

N225 closed at 15,523.11 on Friday, 1-Aug-2014, gained 65.24 (0.42%) over the last 5 trading days.  NKVI gained 2.01 (13.60%) ending the week at 16.79.

N225 finally broke above 15,500 on Monday and has been staying above 15,500 for the whole week.  Even on the day after S&P500 2% drop, it didn't go below 15,500.

Looking at the bigger picture on daily chart, it is a clear break from the tight range of 15,000 - 15,500, with very clear higher high.  The next resistance seems to be 15,800, 16,000.

On the Weekly chart, it didn't look as good.  While N225 has broken above 15,500, it ends with a long pin bar.  If next week, it falls back below 15,500, this is a false break.  Thus, the next week bar is important to tell us more where it is heading.

NKVI gained quite a fair bit (percentage gain 2%) for the past week.  It seems that volatility is returning.

However, let's not forget, on a 5 year chart, we are still in a very low volatility environment.

I noticed something unusual for the past few days.  NKVI went up with N225.  Normally, NKVI is inversely correlated to N225.  That is, NKVI goes up when N225 goes tdown; NKVI goes down when N225 goes up.

Such situation happened in end 2012 when N225 climb from 8,500 to 11,500 and NKVI climb from 17+ to 29+.  Need to monitor this situation closely so that I will adjust my strategy accordingly.

SPX closed at 1925.15, down 5.52 points on Friday.  As posted in this post, SPX has 2% 4 times this year.  In the past 3 times, they were just correction before uptrend resume again.

N225 might follow with a down day when open on Monday.

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