MMA Weekly Report Nikkei Stock Average By Raymond Merriman Jun.20 2022

1. Retrospective

The Nikkei 225 index closed last week at 25,963, down 1,861 points from the previous week. The high for the week was 27,389 on Monday the 13th. The low for the week was 25,963 on Friday the 17th. Since the close fell below the weekly support level, it carried over the previous week's bearish trigger, marking a bearish stance. This is a continuation of the bearish trend. Furthermore, because this close was below the Weekly Trend Indicator Point (TIP) for the first time in five weeks, the overarching trend has shifted from “uptrend” to “neutral.”

2. Cycles

As explained in last year’s Forecast 2022, the Nikkei 225 has a long-term 17-year economic cycle. Its starting point is October 28, 2008, at 6,994, and 2022 marks 14 years from that start. This cycle is divided into two 8.33-year segments, with the first half ending at the “double bottom” of 14,864 on June 24, 2016 and 14,865 on February 12 of the same year. The second half (the second 8.33-year cycle) has now begun.

Moreover, this 8.33-year cycle consists of two four-year cycles. The bottom of the first-4-year cycle appeared on March 19, 2020, at 16,358. From that low, the current (second) four-year cycle has entered its 27th month in June. If this cycle is composed of three 16-month sub-cycles as the first-4-year cycle was, then the first-16-month sub-cycle would have bottomed at 26,954 on August 20 last year (an important change date around August 20–23, within ±3 trading days). In reality, the market then surged, and by September 14 of that year (within the area of the important change dates around September 15–16, ±3 trading days) it reached 30,795, a 31-year high level.

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