Perspective on the Nikkei's Amazing Run

Perspective on the Nikkei’s Amazing Run

If the Nikkei finishes up on the week it will have posted gains in 18 of the past 20 weeks, or 90% of the time.

Dating back to the 1800s, that’s never happened on the Dow.

It happened on the Nikkei one other time in February 1989, 10 months in front of its all-time bubble highs.

It also happened twice on the Nasdaq in March 2000 at its all-time bubble highs (and once in 1989).

So…the Nikkei is currently exhibiting massive out-lier strength that some bubbles have exhibited at/into their tops.

The problem with applying the latter data and outcomes and then drawing the same conclusion for the Nikkei’s current run is that it’s been in a 25-year secular bear market.

In other words, what’s the chance this out-lier strength is indicative of the beginning of some type of secular run rather than the end?

2013-03-14 Nikkei Up 18 of 20 Weeks - Weekly