Nikkei 225, update.

The Japanese market has been one of a few, if not the only one, to go up the last few months while everything else was going down. This fits perfectly with the earlier view that the Nikkei 225 may be making an expanding triangle. Here is an update;

nikkei 225 july 2011 arith

nikkei225 july 2011 log

Both charts are from Yahoo finance, one of a few charting sources that carry this index. Frequently the A and C waves travel the same distance. On an arithmetic scale that would put the Nikkei below zero, so that is not possible. On a log-scale the distance travelled was already equal at the most recent low. But the pattern was not yet complete. Once this latest rise , an e-wave in a triangle , is complete the last part of the 5th wave should take the index to, say 4000 where again the two down parts are equal. All this is going to be spectacularly wrong if we trade substantially through 11000 or so.

An alternative count would be a triple zig-zag. The outcome would be just as bad. See also Ford for another example.