Ratio Technical Analysis for 11/17/2010: Anyone watching the Nikkei/S&P ratio? $NIKK:$SPX broke above the 50DMA, a descending channel and pierced ceiling resistance from November, 2009. Is NIKK/SPX positioning to test that ultimate downtrend? If so, i'm thinking it would coincide with USD/JPY strength. But would the S&P correct further and Nikkei rally? For NIKK/SPX to test that uptrend, the Nikkei must either rise faster than the S&P or fall slower from here. Interesting, I'll be watching this.
Since 11/1/2010, the Nikkei has outperformed both the S&P and Shanghai Index. However, on a longer term basis $NIKK has underperformed. We shall see how the gap closes. The Nikkei recently gathered strength after putting in an inverse head and shoulders pattern. It hasn't participated in the recent sell off. See both charts after the jump. Thoughts?
Nikkei/S&P Ratio ($NIKK/$SPX) - courtesy of stockcharts.com
$Nikkei ($NIKK) vs S&P ($SPX) vs Shanghai Index ($SSEC)
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