Nikkei 225, Japan. Jan. 2010

Nikkei 225, jan 2010

Ford May 9

Ford Jan 10 2010

Look very closely and try not to think ! The top chart is that of the 225, pretty hard to get on the internet so I could not get the length I would have liked, anyway way back when in the 70ties the Nikkei was well under 1000 so the projected low on the top ( semi-log ) chart is not that outrageous in that context. No different from Ford going from 50 to 1 and way less  volatile.  This could be ,in EW lingo, a diagonal triangle and if correct do not buy Japan as some recommend at this point. It would be like buying Ford at $5 when you could have bought at $1. By the way, this pattern is exceptionally reliable and consequently more often than not an excellent predictor!