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February 20, 2006

Tokyo sells off sharply in afternoon session, Mon., Feb. 20, 2006, 9:31 AM

The Nikkei 225 equity index dropped 276 points (-1.75 pct) today, with the afternoon session down sharply. Since hitting its high on Feb 6, at 16,777.40, the Nikkei Dow has dropped to 15,437.93. That is a decline of "8.0 pct in ten sessions!

Here are the charts of the Nikkei 225 today, and for the past six months (not shown on the 6-month graph is today's trading). Along with the NYSE and London, this is the most important stock exchange in the world, and so this broad decline is serious.

Six trading days ago, right after the Nikkei 225 had peaked and come off sharply, I indicated my view that a short-term pullback could possibly see the index fall to about 15,000. It's getting there faster than I had presumed.

So there could be a consolidation starting tomorrow. We'll just have to wait on that, but the other equity markets in the Asia Pacific market remain strong, which could be an indicator that the selling in Japan this past two weeks is over-done.

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Here is the ADVFN.com snapshot of today's trading on the Tokyo Stock Exchange. It shows the major decline in high-quality large cap Japanese stocks. Sony, for instance, dropped "3.6 pct, mostly in the afternoon.

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Interestingly, all or most of the other important equity markets in the Asia Pacific region were strong today.


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Posted by Posted by Bill Cara on February 20, 2006 09:31:56 AM | Category: Japan

Discourse

I hope Shanghai can hold its own.
In fact, I think it can.
Out of 156 analysts that were asked, 142 are bearish. 13% of institutions are bullish, 48% neutral, 40% bearish.
Less than 50% of the Average Joes are bullish.
I think we'll see a huge upday tomorrow(or soon.)
Today was another inverted hammer, same as last Friday, but volume has decreased dramatically in the past 3 days.

Posted by: FirstConsul [TypeKey Profile Page] at February 20, 2006 9:55 AM [link]