I have noticed re the Japanese charts that the Topix second section now seems to be leading on the downside having broken through the 7000 level. Should this be a concern?
The Topix 2nd Section was a topic of conversation at The Chart Seminar over the last few days.
It has been a reliable lead indicator for the market for as long as I can remember and it will need to bounce soon to confirm support in the region of the trend mean.
The Index has a history of trending higher in a very persistent manner but it is also capable of medium-term pullbacks that have tended to be rather deep. If the 2nd Section breaks lower on a sustained basis that will likely suggest the broader market will also experience a headwind.
The Topix Banks Index has been firming from the lower side of its range but needs to continue to hold the 170 area if the benefit of the doubt is to be given to higher to lateral ranging.