Monday, February 15, 2016

Volatility Breeding Confusion

Volatility, a 7% surge in Japan's Nikkei Index, breeds confusion. The bears control the trend as long until a bullish crossover. This trend has produced a 116% annualized gain since the first week of January (see COT Matrix). The bears should be concern that leverage has failed to confirm and focus the decline. If it does, it will likely add to the confusion of the bulls.

Headline: Global markets rally as Japanese stocks surge 7% on extra stimulus hopes

European and Asian markets rallied Monday as Japanese stocks surged after dismal growth data raised hopes of extra stimulus from Tokyo.

Japan’s Nikkei 225 index rebounded from a 5% dive last week to surge 7.2% to close at 16,022.58, its second biggest one-day gain in three years.

Hong Kong’s Hang Seng rose 3.3% to 18,918.14. China was the lone exception as the Shanghai composite index dropped 0.6% to finish at 2,746.20 on its first day of trading after a week-long holiday.



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