Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> is about to close up for the 3rd consecutive week (CC=+3), it's towards the Q3 resistance level at 33984: it's short-term overbought.</li>
<li>There is a good chance that the index will pull back in the next 1-3 weeks, at the moment it looks like the rally has "stalled".</li>
<li>The pullback may be an opportunity to buy again, and ride a rebound to previous highs, we will discuss LONG levels in a separated insight.</li>
</ul>


The Nikkei 225 (NKY INDEX) is about to close up for the 3rd consecutive week (CC=+3), it's towards the Q3 resistance level at 33984: it's short-term overbought.
There is a good chance that the index will pull back in the next 1-3 weeks, at the moment it looks like the rally has "stalled".
The pullback may be an opportunity to buy again, and ride a rebound to previous highs, we will discuss LONG levels in a separated insight.


EQD | The Nikkei Will Pullback Within 1-3 Weeks

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

<ul>
<li>The US election is the ultimate of known unknowns. The markets have endured both Trump and Biden/Harris so impactful policy surprises should be limited. </li>
<li>Hedging cost are running high for Asian equities post August unwind and September stimulus combined with election. </li>
<li>Markets have some momentum and in some cases mean reversion to the price move on the day after the election. </li>
</ul>


The US election is the ultimate of known unknowns. The markets have endured both Trump and Biden/Harris so impactful policy surprises should be limited. 
Hedging cost are running high for Asian equities post August unwind and September stimulus combined with election. 
Markets have some momentum and in some cases mean reversion to the price move on the day after the election. 


EQD | US Election -  Hedge Considerations

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> closed the week down (CC=-2) at 32307.86, it's OVERSOLD, WEEKLY and MONTHLY. </li>
<li>Our hypothesis is that this pullback is about to end (it could last maybe another week, or maybe it's already over...), and will be followed by higher prices.</li>
<li>Go LONG the Nikkei 225 in the support area between 31000 and 32000, this coming week.</li>
</ul>


The Nikkei 225 (NKY INDEX) closed the week down (CC=-2) at 32307.86, it's OVERSOLD, WEEKLY and MONTHLY. 
Our hypothesis is that this pullback is about to end (it could last maybe another week, or maybe it's already over...), and will be followed by higher prices.
Go LONG the Nikkei 225 in the support area between 31000 and 32000, this coming week.


<ul>
<li>After a strong rally in November, the Nikkei is currently in a temporary corrective phase, reaching between the Q1 and Q2 support levels of the MRM LONG chart. </li>
<li>There are 2 possible paths from here: 1) a modest pullback, followed by a rally into the end of December, 2) a dive to &lt;= 31672, and December closes down.</li>
<li>Both these scenarios offer very good seasonal LONG odds for January closing up (based on our SRM model), so we suggest going LONG the Nikkei 225 on the pullback.</li>
</ul>


After a strong rally in November, the Nikkei is currently in a temporary corrective phase, reaching between the Q1 and Q2 support levels of the MRM LONG chart. 
There are 2 possible paths from here: 1) a modest pullback, followed by a rally into the end of December, 2) a dive to &lt;= 31672, and December closes down.
Both these scenarios offer very good seasonal LONG odds for January closing up (based on our SRM model), so we suggest going LONG the Nikkei 225 on the pullback.


Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>New LDP leader and Japanese PM favours interest rate normalisation</li>
<li>This supports our outlook for a strengthening JPY against the USD</li>
<li>The Japanese central bank may now face pressure to raise rates</li>
</ul>


New LDP leader and Japanese PM favours interest rate normalisation
This supports our outlook for a strengthening JPY against the USD
The Japanese central bank may now face pressure to raise rates


Japan

The Nikkei-225 Stock Average is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange. The Nikkei Stock Average was first published on May 16, 1949, where the average price was ¥176.21 with a divisor of 225. 

Nikkei 225 (NKY INDEX)

EQD | The Nikkei Will Pullback Within 1-3 Weeks

The Nikkei 225 is overbought and likely to pull back soon, but this could present a buying opportunity for a rebound to previous highs.

Nico Rosti

EQD | US Election - Hedge Considerations

The US election brings uncertainty, but market impact should be limited due to enduring Trump and Biden/Harris policies. Asian equities face high...

John Ley

EQD | Nikkei 225 WEEKLY Analysis

The Nikkei 225 closed the week down and is oversold, but our models suggest that the pullback is ending and higher prices may follow. The...

Nico Rosti

EQD | Nikkei 225 MONTHLY Analysis

The Nikkei is in a temporary correction phase, with 2 possible paths ahead: a modest pullback followed by a rally, or a dive below 32000 with...

Nico Rosti

Banking on the BoJ

New Japanese PM's interest rate stance could lead to a stronger JPY against USD. Higher rates will help certain sectors in the market

Rikki Malik

EQD | The Nikkei Will Pullback Within 1-3 Weeks

​The Nikkei 225 is overbought and likely to pull back soon, but this could present a buying opportunity for a rebound to previous highs.

Nico Rosti

EQD | US Election - Hedge Considerations

​The US election brings uncertainty, but market impact should be limited due to enduring Trump and Biden/Harris policies. Asian equities face high...

John Ley

EQD | Nikkei 225 WEEKLY Analysis

​The Nikkei 225 closed the week down and is oversold, but our models suggest that the pullback is ending and higher prices may follow. The...

Nico Rosti

EQD | Nikkei 225 MONTHLY Analysis

​The Nikkei is in a temporary correction phase, with 2 possible paths ahead: a modest pullback followed by a rally, or a dive below 32000 with...

Nico Rosti

Banking on the BoJ

​New Japanese PM's interest rate stance could lead to a stronger JPY against USD. Higher rates will help certain sectors in the market

Rikki Malik

The Nikkei 225 is overbought and likely to pull back soon, but this could present a buying opportunity for a rebound to previous highs.

The US election brings uncertainty, but market impact should be limited due to enduring Trump and Biden/Harris policies. Asian equities face high...

The Nikkei 225 closed the week down and is oversold, but our models suggest that the pullback is ending and higher prices may follow. The...

The Nikkei is in a temporary correction phase, with 2 possible paths ahead: a modest pullback followed by a rally, or a dive below 32000 with...

New Japanese PM's interest rate stance could lead to a stronger JPY against USD. Higher rates will help certain sectors in the market