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EWJ

money rotations (theory)let's talk about money rotation for a minute. someone brought up this nikkei chart to me last night, and told me it is close to seeing a strong reversal, after taking a deeper look into it, i will have to strongly agree with their statement. --- notice how the es chart has been going up for the last 189 days, while nikkei has been slumping for this same duration of time. the indicator i use on all my trades is flashing a weekly buy signal right now for the first time since the covid crash on nikkei - see below the reaction it saw after this buy signal was triggered the last time around. Hang Seng (Honk Kong Index) has the same weekly buy indicator, and it's also sitting at the 0.618 wave (2) target. the theory is, since market maker doesn't want the market to just crash randomly - instead what they're going to do is rotate money into the next profitable area (slowly) - which in turn will create prolonged sideways chop \ a weak downward trend similar to what nikkei has been seeing over the last 6 months or so. not sure how long this is going to last, but i favor this scenario over a market crash any day - for the sake of the people, and for the sake of selling iron condors on spx 3 times a week 💸 curious to see how this will play out, but that's the primary scenario as of right now. if we happen to see a sharp correction as mentioned in my previous post, then i suppose we can invalidate the theory stated here. also, a flat correction would greatly benefit the longer term bullish trend, as we would be able to build a very strong base up here, before the last push to 5000~6000 in the years ahead. ps. if you wanted to try and catch some gains from the nikkei play, you could try picking up some december\january calls on $EWJ - they've some very low iv right now, and it could work out very nicely as a hedge against our flat corrective phase.
CME_MINI:ES1!
by Eloquent
4
This Country’s Stock Market Is Ready To OutperformDiversification is one of the keys to growing and preserving wealth. Putting all of your eggs in one basket (pun intended) can be dangerous. Luckily, diversifying your investment portfolio has never been easier. There are more than 7,000 exchange-traded funds (ETFs) that provide investors with exposure to various markets and asset classes across the globe (international stocks, bonds, commodities, real estate, etc.). For investors that want to diversify their stock portfolios outside of the U.S., Japanese (ticker: EWJ) stocks represent an interesting buying opportunity. While stock buybacks have slowed significantly among U.S. corporations in 2020 (down 25%), they’ve surged in Japan, rising 48% this year. Nonfinancial firms have around 285 trillion yen ($2.6 trillion) in currency and deposits (highest level in two decades). Japanese companies have increased their cash stockpile by ~100 trillion yen (33%) over the last decade, suggesting that corporations have plenty of room to continue returning capital to shareholders over the next few years. In addition, the valuation of Japanese stocks is attractive relative to the U.S. The price to earnings ratio on Japanese stocks is ~15x vs. ~17x multiple on U.S. equities. Furthermore, investors are underinvested in Japanese equities. Over the last 5 years, investors have sold ~16 trillion yen worth of Japanese stock, after plowing ~25 trillion yen into Japenese stocks between 2012 and 2015. If (when) investors begin reinvesting funds to the region, Japenese stocks will receive a boost. Japanese companies have increased their profitability. Profits as a percentage of sales have doubled from 4% to 8% over the last five years. More importantly, the Bank of Japan (BOJ) is the only developed country central bank that is actively involved in purchasing stocks. The BOJ is a top ten shareholder of more than 50% of publicly traded companies and has no plans of slowing down. In fact, early this month BOJ extended and doubled its purchases of Japanese ETFs- lifting its annual target of 6 trillion yen ($57 billion) to 12 trillion ($114 billion) as part of their aggressive monetary policy. This will continue driving demand (buying) for Japanese equities going forward. Lastly, Prime Minister Shinzo Abe recently announced a ~$1 trillion (108 trillion yen) stimulus package. This is equal to 20% of Japan’s national GDP. Compared to the U.S. stimulus package of $2.2 trillion, which equates to only ~10% of GDP. This significant fiscal stimulus will support the Japanese economy as it deals with the coronavirus. Among other things, the government will provide more than $55 billion in cash payments to families and small and medium-sized businesses and $240 billion in interest-free loans. Japanese companies have strong balance sheets and our returning large amounts of capital to shareholders, in addition, Japanese fiscal and monetary is the most aggressive in the world. All of the necessary ingredients for Japanese stocks to move higher are in place. It’s time investors placed their (buy) order. -Appo Agbamu, CFA Nothing in this email is intended to serve as financial advice. Please do your own research.
AMEX:EWJLong
by AhrvoStockApp
Coronavirus Regional Long/Short Japan (EWJ) outperforms as Coronavirus cases are low (due to low testing), but country now on the verge of a massive virus outbreak, in line w/ EU & US. Italy (EWI) lags DM, seen as new epicenter of Coronavirus. Country on lockdown, virus priced in (relative to Japan). Italy also has sov debt & banking crisis overhang- but Japan also has massive sov debt & banking crisis, just not as widely publicized. Banking/debt crisis aside, strictly from coming Coronavirus data reaction, RELATIVE pair trade: Short EWJ (Japan) / Long EWI (Italy) ETFs are FX hedged to mitigate some of USD vol interference.
AMEX:SPYShort
by acrossthespread