MMA Weekly Report Nikkei Stock Average By Raymond Merriman Oct.25 2021
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1. Review
Last week's Nikkei Stock Average closed down 263 points from the previous week, at 28,804. The week's high was on the 20th (Wednesday) at 29,489. The week's low was on the 22nd (Friday) at 28,546. The week's high approached the upper resistance line but did not surpass it and retreated. While the close was below, making it neutral, this was a weak tilt. However, this close price had not exceeded the weekly trend indicator point for four weeks, so the underlying trend remains maintained as “neutral.”
2. Cycles
As explained in my book ‘Forecast 2021,’ the Nikkei average has a long-term market cycle of about 17 years. The starting point is October 28, 2008, at 6,994, and this year marks the 13th year from that start. The 17-year cycle is divided by an 8.33-year subcycle into two halves, with the first half ending at the double bottom of 14,864 on June 24, 2016 and 14,865 on February 12, the same year. The latter half (the 2nd 8.33-year cycle) has begun from here.
Furthermore, this 8.33-year cycle comprises two four-year cycles, forming the bottom of the first four-year cycle at 16,358 on March 19, 2020. The current four-year cycle has entered its 18th month from that starting point this month.
If this cycle is composed of three 16-month subcycles as the previous four-year cycle was, the first 16-month subcycle would bottom at 26,954 on August 20, the 17th month from the start (August 20, 2023 ± 3 trading days, a ★★★ critical change day). In fact, the market rallied sharply from there, and by September 14 (September 15–16 ± 3 trading days, within the area of the ★★★ critical change days), it reached 30,795. It not only surpassed the year-to-date high but reached a level not seen in 31 years.
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