Mastering the Market of Kono Hiroshi: Enjoy the Market｜Episode 8 [Hiroshi Kono]

Hiroshi Kuhara Profile

After joining Nippon Kan-Ei Kaikaku Securities (now Mizuho Securities) in 1971, he worked as an analyst in the research department. After a stint in the United States, he consistently conducted information and market analysis on Japanese stocks. In 1996, he transferred to an asset management company (now Asset Management One), serving as head of research and head of the investment department, and later as executive managing director and head of the Investment Trust Management Division. He retired in 2012. Since then, he has appeared on TV and radio, etc. His experience in market analysis focused on Japanese stocks spans half a century.

Newsletter:https://www.gogojungle.co.jp/finance/salons/8812/

※This article is a reprint/edit of an article from FX攻略.com October 2020 issue. Please note that the market information written in the body may differ from current market conditions.

※Data is as of the end of July 2020

This month's issue will proceed with three themes. First, “Short selling ratio and intraday volatility.” We want to determine whether the market is moving toward a stable downward trend with little downside risk, or if it remains unsettled with volatility and concerns about a breakdown, and how to interpret that.

Second, we will delve into price indicators useful for determining the slope/direction of short- and medium-term stock prices and their relative positions to identify price trends and turning points.

Finally, we will consider price indicators effective in confirming new highs and methods to avoid missing selling opportunities from other technical indicators.

Short Selling Ratio and Intraday Volatility

First, I would like to focus on the short selling ratio and intraday volatility. The data show a low short selling ratio and low intraday volatility in the cash market, which is desirable for the market to move toward a stable direction.

This year, since around the May holidays, there has been no strong seller, the short selling ratio has remained low and stable. At times, the previously sharply elevated volatility has also declined significantly, and the market is moving toward a calm direction.