After the surprise move from the Bank of Japan to take key interest rates into negative territory, it is interesting to see how the Nikkei-225 Index (and the yen) have reacted

with the Chinese markets closed for the Lunar New Year holiday. February’s slump from Ichimoku cloud resistance can certainly not be blamed on contagion or meddling by the People’s Bank of China. Technically, it is a third leg in the bear market that started in the third quarter of 2015, where wave C has matched wave A’s drop. Bearish momentum is so strong and support close to current levels is so poor that we expect the decline to continue to 14,595 points – a 50 per cent retracement from the low in 2012.

Nicole Elliott is a technical analyst

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