Delivery date: 2016/10/17 07:26

There are two patterns when the market is rising

I would like to整理ize again what background there was
when the stock price was rising on a weekly basis
this year.
The table below shows all instances this year in which the Nikkei Stock Average
rose by 500 yen or more on a weekly basis; the three check points
are: first, whether the price had fallen sharply beforehand; second,
whether there was a relative decline in the short selling ratio;
and finally this is linked to the relative decrease in the short selling
ratio, but also whether overseas investors were buying heavily.

(Weekly top gainers and their background)
Gain (weekly): Change in Nikkei Stock Average from the previous week
Change in short selling ratio:
Short selling ratio (5-day MA) versus the previous weekend

Gain Short selling ratio Change in overseas investors
and buying amount
~7/15 +1,390 yen ▲2.9% +10,005 billion yen
Last weekend (7/8) was a low. Down 668 yen in 4 days
Short selling ratio fell, overseas investors bought heavily

~4/15 +1,026 yen ▲3.1% + 6,765 billion yen
Previous weekend (4/7) was a low. Down 1,419 yen in 7 days
Short selling ratio fell, overseas investors bought heavily

~2/19 +1,014 yen
Until the previous weekend (2/12), prices had fallen 2,912 yen in 8 days

~3/04 + 826 yen ▲1.9%
Relative decrease in short selling ratio

~7/01 + 730 yen
Dropped 1,286 yen in one day at the previous weekend (6/24)

~4/22 + 724 yen ▲2.9% +9,032 billion yen
Decrease in short selling ratio. Large net purchases by overseas investors

~8/12 + 665 yen ▲3.2%
Down 552 yen in two days to the August 3 low
Decrease in short selling ratio

~9/02 +564 yen ▲5.5% + 4,373 billion yen
Last weekend (8/26) was the low
Short selling ratio fell sharply. Overseas investors bought

~1/29 + 559 yen
From the beginning of the year, up to the previous week (1/21) there was a large decline of 3,016 yen

The backgrounds for the above rises can be condensed into two things.
One is that the price had fallen sharply by the previous week
In this case, the price rises as a strong rebound from the large decline, and no special buying material is needed. The second

is that the five-day moving average of the short selling ratio compared to five days earlier
significantly decreased; in this case, in four out of six instances
there was a substantial buying by overseas investors in tandem.

As of the end of last week (10/14), compared with the previous week,
the price was down 3 yen, and the short selling ratio (5-day MA) also rose by 0.5%
Temporarily, conditions for the price to rise are not in place. It is expected to be a heavy week ahead.
We anticipate a sluggish week.

The background when stock prices are rising comes from Kono Hayao's "From the Technical Room"