Credit trading unrealized P/L rate indicates a market turning point

Cross of the evaluation profit and loss rate between the "buy" side and the "sell" side

In the credit trading, the evaluation profit and loss rate of the "buy" side and the "sell side" crossed in the past 1 year and 10 months

on July 3, 2015, November 18, 2016, and March 24, 2017, only slightly

three times. Moreover, these three times occurred at stock price lows and

were signals of a market reversal.

(Case of 2015, June–July)

Sell side　　 Buy side　　 Stock price

6/26 ▲7.35%　＜　▲6.09%   20,706 yen

7/03 ▲4.64%   ＞　▲6.31%   20,539 yen

The evaluation profit and loss rate for margin trading is calculated as of every Friday.

The Nikkei Stock Average was at a high of 20,868 yen on 6/24. Until the week when a high was recorded, buy-side favored, and in the following week, it shifted to sell-side favored.

The cross from buy-side to sell-side favored at the given stock price level was between 20,706 yen and 20,539 yen.

This sell-side favored period continued until the week of the presidential election in November last year, for 71 consecutive weeks. It is clear that a major reversal occurred.

(Case of November 2016)

the leading performance of the margin trading evaluation profit and loss reversed in November last year. It overlapped with the start of the Trump market.

(November 2016)

Sell side　　　　 Buy side　　 Stock price

11/11 ▲5.20%　＞　　▲11.31%   17,374 yen

11/18 ▲9.77%   ＜　　▲ 8.21%   17,967 yen

Trump Shock led to a low (11/09, 16,251 yen)

and until the week when that low was recorded, sell-side favored, but in the following week it shifted to buy-side favored. At the price levels, it remained between 17,374 yen and 17,967 yen. This was almost four months since the previous reversal.

Subsequently, the buy-side favorable trend continued until March of this year.

The period of double-digit losses for the sell side extended from 11/18 to 2/24 for 14 weeks, showing how constrained the sell side was.

(Case of March 2017)

Since this year began, a high-range consolidation market persisted, but in late March this year, after about three months, it again reversed from buy-side favored to sell-side favored.

Sell side　　　　 Buy side　　 Stock price

3/17 ▲9.77%  ＜　 ▲6.40%   19,521 yen

3/24 ▲5.02%   ＞　▲6.82%   19,262 yen

Between 19,521 yen and 19,262 yen, it entered a bear market. This range will be one of the barriers to be watched when attempting a rebound.

The most recent (4/14) sell-side evaluation profit and loss rate is ▲2.12%, the same level as 10/7 last year (▲1.81%), and buy-side

▲11.69% is the double-digit evaluation loss rate since 11/11 last year.

As seen above, the relative performance of buy-side and sell-side in margin trading has marked turning points that have signaled market reversals.

The reversal to sell-side favored on 3/24 indicates confirmation of a bearish market or a prolonged stagnation.

This also suggests concerns that a bearish market or range-bound market will persist.

また結論としては、