S&P500 Eyes Record Highs, Nikkei Appears Less Confident

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The Nikki has broken the bearish trendline from the September high, trades just beneath the July highs. As it trades just near a resistance level, it entices the potential for a pullback. However, the probability of a retracement appears highs because USD/JPY and the US2-JP2 yr yield differentials have also tested their bearish trendlines.

  • Counter-trend trades could look to fade into minor rallies beneath 2,185, and seek a target around the broken trendline
  • Bulls could seek to buy a dip once a new level of support has been established.
  • Alternatively, bulls could look to wait for a break above 2,185 before entering long, especially if we see US indices break to new highs (along with USD/JPY and the US2-JP2 differential.
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