The Nikkei’s Strange Divergence

One of life’s certainties over the past decade or so has been that the BOJ would always find a way to keep the Nikkei rallying.  When QEn ran out of steam, there was always direct purchases of stocks via ETFs.  So, it was surprising to see NKD’s rising channel, in place since Fukushima, break down in December.

True to form, it has since made a strong comeback.  But, it has paled in comparison to the S&P 500 (the thin purple line.)  While SPX is approaching its all-time highs, NKD is approaching a .618 retracement and a backtest of the broken channel.A possible warning sign?

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