By Chris Becker
Looking at Chinese stocks first, where last week saw the Shanghai Composite closed for most of the Chinese New Year holiday, reopening on Friday with a solid close to be 1% higher and continuing to stabilise above tentative support at the 2600 point level. With the US/China trade talks the main focus, possibly overshadowed by more internal stimulus, there is confidence building here but I’m waiting for a significant close above the high moving average as momentum remains weak and the 200 day moving average is still signalling a bear market on the weekly chart:
Japanese stocks have switched back to bearish mode despite a relatively weak Yen. The weekly chart of the Nikkei 225 shows price was clustering around former support, but firm resistance at the 21000 point level but last week saw a reversion and a failure to breakthrough. The usual inverse correlation with Yen seems to have broken down here so I’m not expecting any heavy lifting this week as domestic policy weighs. I’m watching the low moving average at ca. 20200 points for a breakdown back to the December lows:
