As I currently type this the U.S. futures market are currently selling off in regard to reports that a nuclear reactor was struck in Ukraine and is currently on fire with personnel not able to reach as of yet. (at least that’s what many are equating for the reason)
As bad as that is, what I’m going to point out is the following that has the implications of a “melt down” of its own, only this one concerns the entire market structure I’ve been warning. And it’s in Japan.
The following chart is of the Nikkei 225 (Japan’s S&P or Dow equivalent) where there markets are currently open and trading. What I want to point out to you is the following…
From a technical analysis viewpoint and framework. If the current selloff continues as it is showing to be doing currently, where it breaks through that “red line” I’ve drawn. There is real danger that the next support for that index lies around the 24000 area. If it gets there and stays there, or worse, goes even lower. That represents about a 2500 to 3000 point drop of between 6% to 9% respectfully, and could be more.
Currently as I type this it’s bouncing between 2.5% and close to 3% down. But the day session has just started there and there’s a lot of “session” left to go.
If that were to happen, the knock-on effects that will surely hit our own markets along with the entirety of Europe’s could very easily create the conditions for that “Limit Down” scenario I’ve been warning about.
I am not saying it will happen, what I am saying is that all the conditions for it to happen are now actively and forcefully manifesting. Here’s that chart. To wit:
The above is such a sole causation to the entire premise, I’m not even going to show the U.S. markets, for it’s all consequential on the above. For if it happens there – It’s going to travel here faster than anyone ever dreamed, let alone thought possible.
As always, we shall see. But that’s where I’m completely focused at this moment as I type this ~ 8:15pm EST. Also remember: Japan’s central bank is not shy about showing its hand as to moving in when it believes trouble may portend and “save” its market via buying it horns-over-hooves when needed. Which is also why if that level is lost, it may be a sign that the central bank is not able to quell it, which would in-and-of-itself further express just how volatile and unstable everything truly is.
That’s why I’m both watching it and highlighting it here, now.
© 2022 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.