Nikkei First Leg Down Likely Completed

When S&P was breaking its previous day low and flushed below 1600. Nikkei had a major stop run that cleared its 12800 downside target I mentioned a few days ago. The break of 12800 unlocked a wave of selling that dropped 400 points quickly and bounced back up with ES.

Right after this flush, a huge wave of buy programs were launched in Emini S&P to take it back up to 1615-1616 area. This sparked a strong short cover rally into the close.

This may mark the end of the selloff in Nikkei for now.

This is, however, not a buy setup for Nikkei as its 20% drop is in place. Nikkei will likely enter a long term bear market from here for at least a few years. It is okay to long on counter-trend basis when the opportunities present themselves but this low established today in Nikkei is not the long term bottom.

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