MMA Weekly Report Nikkei Stock Average By Raymond Merriman Jun.10 2023

【Note】 Mercury enters retrograde from December 29, 2022 to January 18 of this year. During retrograde periods, technical analysis and support & resistance areas are less reliable than usual, so it is prudent not to engage in new position trading. This is because, for the reasons above, trading signals may show “false signals” and suddenly be contradicted. However, for active and short-term trading at a 1–4 business day interval, the following analytical methods should be参考able without issue, in our opinion.

1. Review

In the first week of the new year, the Nikkei Stock Average closed at 25,973, down 120 points from the previous week. The week's low was 25,661 on Wednesday the 4th. The week's high was 26,034 on Friday the 6th. Although the week's low fell below the lower boundary of the weekly downside support line, the close was above it, triggering a bullish signal. However, since the week's closing price remained below the Weekly Trend Indicator Point (TIP) for six consecutive weeks, the underlying trend remains in a “downtrend.”

2. Cycles

As discussed in the December issue of “Forecast 2023,” there exists a long-term market cycle of 17 years in the Nikkei Stock Average. Its starting point is October 28, 2008, at 6,994. 2023 marks the 15th year of that cycle. This cycle is divided into two 8.33-year segments, with the first half ending at the double bottom between June 24, 2016 (14,864) and February 12, 2016 (14,865). From here, the second half (the 2nd 8.33-year cycle) began. Furthermore, this 8.33-year cycle is composed of two four-year cycles, with the first-four-year cycle bottom appearing on March 19, 2020 at 16,358. The current (second) four-year cycle, based on that low, is 34 months old as of January 2023. If this cycle is composed of three 16-month sub-cycles as the first-four-year cycle was, then the first-16-month cycle would bottom at 26,954 on August 20 last year (Aug 20–23, ±3 trading days★★★ important change day).

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