Yesterday I wrote about Japanese economy. Well, calling it “writing” would be overly ambitious, but I made some remarks. However, another thought about Japan occurred to me short time ago. Stock markets are falling like a rock right now and I just couldn’t help to think what if this bear market is like the one which started in Nippon in 1990? At the time real estate bubble burst over there, Nikkei average was reaching 40,000 level. Now, 19 years later is at, what, 7650 or so. During this time Japanese equities never recovered. Sure, there was couple of run ups, but over time they have been getting progressively lower. Is it possible that our own bear market could last this long and be that severe? Some people would argue that this is not Japan, things are different, we are more proactive and I’m comparing apples to oranges. But why exactly couldn’t this happen here? Japan is not say, Zimbabwe, but a second largest world economy. If there is another stock market to compare ours to, this would be it. Very scary thought, still trying to find the bottom 20 years after the crush. Hope this will not be the case, but possibility surely is present. Looks like equities are making a run on November lows. If that goes, another major support is long way down….
Guess I have to get my trading into high gear, so 20 years from now I don’t have to worry about stock market. In this case either my decision making process gets better, or the markets behave the way I want. Yeah, right. AUD-CAD trade from yesterday didn’t work as planned
Shortly after order was filled market turned against me. Previous high as well as 100 SMA held, so I remained in it, but about 2 hours ago lost any residual confidence and closed it for 29 pips loss. Here is another reason why.
Another CAD cross, this one with EUR, behaved a little differently. Here the price took out previous high on this time frame. I jumped on the correctional move down after first bearish candle, for almost 100 pips. This pair behaves as if is setting up another move up. It conflicts with my prior opinion of strengthening CAD so I’m stepping away from the loonie now. Since market doesn’t want to move the way I want it to, time to wait until behavior is more recognizable by me. No sense fighting it.
Will see if EUR-GBP is ready to retest the low 0f 0.8635, although my objective 0.8680-70. Really no guess on how long it is going to take, market is not moving as fast as before, so I don’t have great expectations. Also ready to buy Yen pairs above latest highs and give CAD another look when warranted.Mike K.
Interesting thought. While I don’t know what will happen, it is very possible that the bear market will last much longer than most of us think possible. Japanes example would suggest that, yes, it CAN happen here or anywhere.
Glad to see you back in EUR-GBP trading. I also think it will head lower.
We will see, Andy. If the major trend reversed, we might be trading it on the short side for some time.
Nikkei is not the only example of prolonged bear market. Just look at NASDAQ, so many years after the top and still could be long way to go down. It can easily be DOW or S&P, but, like you, I hope it won’t happen.
Renata, you are absolutely right. Long bear stocks bear markets might be a sign of times now.