We did not call this an update, preferring instead to forget previous errors. This index was down almost 24% at the recent lows measured from the highs of 2015. Our attention was drawn to this index simple because of the Bank of Japan’s recent moves to go for negative interest rates. Monetary stimulus has done very little for this economy other than devalue the yen. Now with one of the worlds highest levels of government borrowing they want to do a little more just to see if this time it might work.
From an EW perspective we have two almost but not yet equal legs down that together could form an a-b-c correction. That would call for a new high down the road. Alternatively it could become a series of 1-2s or something very bearish. Of course you always, no matter what get to a point where you have these two possibilities while you wait for the pattern to develop further. The only thing we do know for sure is that a C leg MUST subdivide in a 5-wave sequence so this is not done yet. We are presently in a 4th wave of something. This is an amber light in our trading approach, leave it alone.
By the way, the DOW is not in a significantly different position.