Butter, Meet Hot Knife
Coming into this week the Nikkei faced incredibly important and formidable resistance.
As a refresh that resistance included:
- A falling trend-line off the 1989 and 2007 highs – the most important tops in the index’s history
- 61.8% Fib retracement resistance, formed off the index’s 2007 highs and 2009 lows
We show both in the chart below.
Note, with the move to 14,600+, or +660 bps on the week, that the index just tore through both sets of resistance, like a hot knife through better (apologize for lack of a better analogy).
This break-out, so long as it holds, is likely a very big deal for the Nikkei going forward given the importance of the resistance that was at hand.