MMA Weekly Report Nikkei Stock Average By Raymond Merriman Jan.16 2023

[Note] From December 29, 2022 to January 18 of this year, Mercury is in retrograde. During retrograde periods, technical analysis and support & resistance levels tend to be less reliable, so it is prudent not to engage in new position trading. This is because, for the above reasons, trading signals are prone to “false signals” and can suddenly be negated. That said, MM&A believes that for active short-term trading at 1–4 business day intervals, the following analytical methods can still be参考ed without issue.

1. Review

In the week of the big first trading day, the Nikkei Average closed at 26,119, up 145 points from the previous week. The week's high was on the 12th (Thursday) at 26,547.

The week's low was on the 13th (Friday) at 26,090. Although the week's high exceeded the weekly resistance line, the closing price remained within that area, so sentiment was mostly bullish; however, the weekly closing price was below the Weekly Trend Indicator Point (TIP) for seven consecutive weeks, so the overall trend remained in a "downtrend" state.

2. Cycles

As explained in the December issue of “Forecast 2023,” there exists a long-term market cycle of 17 years in the Nikkei 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; the first half ended with a “double bottom” at 14,864 on June 24, 2016 and 14,865 on February 12 of the same year. From there, the second half (the 2nd 8.33-year cycle) begins. Furthermore, this 8.33-year cycle consists of two four-year cycles, with the first four-year cycle bottom appearing at 16,358 on March 19, 2020. The current (second) four-year cycle, starting from that low, is at 34 months as of January 2023. If this cycle, like the first four-year cycle, is composed of three 16-month cycles, then the first 16-month cycle would bottom around last year’s August 20 (August 20–23, ±3 trading days, a★★★ important change day) at 26,954.

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* MMA Report is an analysis prepared from Mr. Meriman’s unique perspective for information purposes and does not constitute buy/sell recommendations.

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