- Global financial markets continue to react negatively to global trade war concerns.
- Asian, European and US equity averages have all rolled back lower this week into late May, damaging rebound effort made from mid-May.
- This sets the immediate risks lower and starts to resume the negative tone set during the significant selloff in the first half of May.
- The threat into month-end is now for more bearish intermediate-term signals back through the current May lows.
- Today we focus on the Japanese benchmark average, the Nikkei 225.
Nikkei bear threats increasing
A setback from midweek and again Friday, damaging the rebound theme from last week and threatening a more negative development into late May, leaving risks lower for next week.
On an intermediate-term basis, the selloff in the first half of May neutralised the intermediate-term bull trend for 2019 with the surrender of the 38.2% Fibonacci retracement level at 21058.
This leaves an intermediate-term range as 22362 to 20751, BUT with risks skewed for an intermediate-term bearish shift below 20751.
- We see a downside bias for 20922; break here aims for 20850, maybe key 20751.
- But above 21175 opens risk up to 21267, maybe towards 21430.
Intermediate-term Range Breakout Parameters: Range seen as 22362 to 20751.
- Upside Risks: Above 22362 sets a bull trend to aim for 22699 and 24448.
- Downside Risks: Below 20751sees a bear trend to target 20315, 20000 and 18948.
Daily Nikkei 225 Chart