Nikkei 2017-2020

 As I mentioned at the end of my 2013-16 forecasts, the picture for the Nikkei looks very interesting for the coming few years. This seems to confirm what the Japanese and Yen charts are saying. The three have lots of common factors and they are all screaming at me in 2019-2020.
2017
 
As I write this (5th January 2017), the index is slightly up on the year end, but there are enough factors to suggest to me that this picture will not continue  through January and February. Some caution and paring back by investors is on the cards.
March to May, sees the start of a fresh period  and although there are mixed factors in these 3 months, aside from some glitch indicators the picture is more positive than January and February.
More long term changes start to seep in in June through August. It is a new scenario for the index, a shift not seem since its foundation. The effects won’t be seen for some while however. The only indication now of change might be an increase in trading/turnover.
Although investor sentiment is little over-reactive now a major rise is unlikely.
September and October sees some surprises and more volatility- some of it quite extreme. Chances are that the index will rise overall, but not smoothly by any means.
November and December see some of the volatility calming down, It is rather a mixed time but there does seem to be enough optimism to push the market higher again
2018 
January and February are again a bit mixed. There is positive sentiment but volatility is being restrained- a curious period which will probably end much where it started.
March to May looks more interesting. Once again volatility takes centre stage and technical glitches once again look possible. It is difficult for investors though- perhaps increasing fear is likely. The trend direction if any looks positive despite this though. 
June to August sees that flow through into investor confidence. Although there are some undercurrents of delusion and suspicion investors are likely to be on a roll now. Big gains in value can result.
September to November obviously sees this reduce and once more the dominant picture is one of volatility. However there is little to indicate an overall downside so once can expect continued support for the index value even if there are no trend gains. Only right at the end of November might there be a wobble.
December is once again generally positive – possibly without real foundation as trade seems disconnected from value.
 
2019
 
2019 to 2020 are pivotal years.
And the picture begins to change in January and February of 2019, when a major (30 year) turning point is reached.
I expect falls at this time as there is nothing compensating for this. However these falls are not necessarily long term this time.
March and April are months of volatility but no trend.
May and June see more action, with sentiment changing and despite some restrictions and a tricky environment there can be rises.
The end of July is particularly sensitive.
August to October will give an indication of where things are heading in the longer term, but the indications are that this is about technology and not value.
November and December however are about value. Once again there is major volatility and extremes of investor sentiment.  Much re-adjustment of positions is likely. Although there aren’t indications of long term complete collapse, this is definitely a time for caution. Watch currency markets as this might be more important than the stock market itself.
2020 
2020 continues the trends from 2019. It is a pivotal year for the index and continues to be full of drama.
January and February see more volatility, but actually this may well be accompanied by big rises. The clearest thing is the change of direction in prices now.
March to June sees another chapter in the story. It is a mixed period. Some weakness is possible, although there are big global shifts in the fundamental values of the index components. There appears to be far less volatility and more trend now.
And July to October looks positive. But caution is advised- this is less clear cut than the previous months- severe fear might be restricting growth.
November is definitely all about that fear. Although I’m not seeing this meaning big falls at the moment – I do have some concerns. There is certainly major consolidation of positions and this will need re-assessing later ( in 2019) in the light of the Japan and Yen pictures.
December is a pivotal month everywhere. It certainly is for the Japanese index as well as the Yen.  I have concerns for the index proprietors at this time too. Perhaps externally generated events override everything now.
 

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