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Request For Doc Re Nikkei

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#1 Scully


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Posted 15 December 2002 - 03:21 PM

Doc, could you please add coverage of the Nikkei and the Yen in the daily Anals? From a cycle viewpoint, it would appear that an investment in the Nikkei made in $US offers excellent potential going forward. Using the method posted previously of fitting a modulated sinusoid to each of the cycles, it is possible to make a projection into the future of the expected performance of any given index or security. The projection for the Nikkei is for a bottom right about now, followed by a significant rise. Similarly, the Yen/dollar ratio should begin decreasing rapidly any time. The combination of these two forces means that an investment into the Nikkei denominated in $US goes up double time. A comparison with several other sectors suggests that this will be the best investment in the next five years - even better than shorting the Naz.

I believe the fundamental reason for this projected cyclical outcome is that the Japanese investors in the US financial markets are about to get hit with a double whammy. Not only are long bond rates about to rise, but the falling US dollar will double their pain. I read somewhere that 30% of all US treasuries are owned by the Japanese. If you look at the cycle projection of this investment from their viewpoint, namely the future value of the 10 Year bond in Yen , there is a year of terrible pain in store for them. This is likely to cause them to pull their money back home to Japan, resulting in a snowballing effect - this will cause the Yen to rise even more, and the 10 year bond price to fall and yield to rise even more.

Anyway, I would sure appreciate it if you could start coverage of the Nikkei and the Yen. I have moved about one third of our holdings into some Japanese equity mutual funds, and it would be nice to hear your opinions on it. Thanks in advance.

#2 DrStool


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Posted 15 December 2002 - 03:30 PM

Scully- I'm afraid I'll have to leave that to you and other experts. Doc is at the limit of his self-admittedly limited intellectual capacity.

Your anlysis is always impeccable and fascinating. You should be able to generate some in depth discussions of the issue here on the board. If I have anything to add I will. Perhaps over the Christmas holidays I'll have time to set up charts on Nick Me and Yen to post here.

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#3 Metamucil


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Posted 15 December 2002 - 08:54 PM


I've been watching this Japanese end-of-the-world scenario finally making its way to Crapvision....and am looking for a bottom. Meanwhile, it has been a swingtrader's dream...and if you look at a 13-year chart, it explains how a Grizzly can be so cruel.

Yes, Cmaps may reveal some very interesting longer term scenarios. Meanwhile, it still looks anemic.

Monthly fib chart:

I appreciate your work. Hurst showed genius elegance in total simplicity....and Doc is the finest practitioner, imo.
Doc, we need some of your DNA.....for cloning :grin:
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#4 DogBoy


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Posted 15 December 2002 - 10:00 PM

Any chart analysis I've read in the past project the ultimate bottom of N225 at like 3000-4000 --- a long ways from where we are now.

As for investing in Japan the one thing I'd worry about is Japs turning inward again and returning to their isolationist past (pre-1850).

This is a real possibility as they get screwed every which way financially by the rest of the world --- especially the US.

Also I have a relative who teached English there and has been there for like 10 years and know the place well.

Japan is not really a capitalist society at all. It's run more like feudal kingdoms in the dark ages in Europe.

You have to ask yourself what is the potential increase in shares in that kind of a place ?

You'd be at hte mercy of some modern day feudal "lords" which is how most Japanese society is till organized. And it's not likely to change.

Japs love modern "things" but I doubt they'll ever really adopt modern US-style living as the NWO would hope for them to do.

#5 Flaming Turds

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Posted 16 December 2002 - 01:22 AM

Historically bubbles generally end lower than where they started. This would put the Nik below 5000.

#6 Grand Poopercycle

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Posted 16 December 2002 - 12:56 PM

Tangentally, the reconstruction of Japan and Germany post-WW2 is oft offered as guidepost for rehabbin' Eye-rack post-smackdown. Perhaps current grinddown in Japan offers cautionary tale, as there was better raw material in 1946 version of Japan(industrial infrastructure, work ethic, general compatibility w/Western Civilization/economies) than current versions of lands dominated by "Religion o' failure/incompetence/insane violence/u-pickit".

#7 Goldmember


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Posted 16 December 2002 - 05:33 PM

Great projections Scully. This is what I like to see every now and then. Looking at the big pictue of things and how it all inter-relates to each other. I believe your analysis on U.S. Treasuries, the dollar and the yen are a wee bit premature though. Bank of Japan added some curve to the blade of their fiat hockeystick and will be buying up the crap stock collateral holdings of the commercial banks, which will be Bobby Hull slapshots in the currency competitive devaluation league game. No country will for long support an increasing currency valuation relative to the dollar merely to keep trade goods flowing. Gotta sell those Hondas and Yamahas!

Given my leanings toward currency weakening across a broad range of exporters depending on U.S. consumption I would delay the disconnect between the Nickme and the S&P, Nasduck. I would also recalibrate your gold and silver projections a little higher as a result of the delay of this disconnect.
However, I am still learning at this prognostication thing, as we all are. :grin:
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