Eoin's personal portfolio: Nikkei-225 long initiated
Eoin Treacy's view I closed my long in the Atlantis Japan Growth Fund on May 23 rd and have been waiting to re-enter the market.
As liquidity providers banks should benefit from a liquidity fuelled rally. Considering the relative size of Japan's quantitative easing compared to its economy, it is no surprise that the banking sector led on the upside and also peaked ahead of the wider market during the current pullback.
The Topix Banks Index doubled from November and encountered resistance on May 14th near the psychological 200 level. It found support today in the region of the 200-day MA, following a precipitous decline, and a sustained move below yesterday's low near 155 would be required to question potential for support building.
The Dollar also found support against the Yen today, maintaining its progression of higher reaction lows. Some follow through tomorrow would bolster the consistency of the medium-term uptrend.
I opened a long this afternoon in the September Nikkei-225 contract paying 13,655 including spread-bet dealing costs. The risk is that the Index pulls back further and/or a support building phase proves volatile.