Nikkei and NASDAQ: History Being Remade?

Jun 3, 2009: 12:08 PM CST

The following article is excerpted from Club Elliott Wave International’s post “Nikkei and NASDAQ:  History in the Remaking” – only I have added charts for emphasis.

Let’s take a long-term monthly view of Japan’s Nikkei Index showing the crash of 2000 and 2008:

The Nikkei recovered stronger (retraced a larger percentage) than the NASDAQ Index did during the “Bull Market” from 2003-2007.  Both markets peaked about the same time before plunging to new lows not seen in over a decade.

The Nikkei actually peaked at over 37,000 in late 1988 before falling to its recent value of 7,000 – a staggering drop.

Now, let’s take a comparison look at the US NASDAQ Index over the same period:

In retrospect, or in comparison, the Bull Market from 2003 – 2007 seemed very weak, retracing around 40% of the peak above 5,000 (hard to believe that ten years ago, the NASDAQ which now trades under 2,000 once traded at 5,000).

On a positive note – if one can call it that – the NASDAQ actually failed to make a new price low as the other major US and Global indexes did in late 2008.

Click over to read the whole article Nikkei and NASDAQ:  History in the Remaking:

Market analysis is a venture in which historical studies have a clear practical value — namely, as a tool that you can use well, badly, or not at all. Not at all is better than badly, but history done well usually produces market analysis done well. Patterns and situations from the past can indeed be relevant to the present. What’s more, similarities and differences can be equally instructive.”

The article then compares the 1988 peak in the Nikkei to the 2000 peak in the NASDAQ.   I found it interesting – for whatever reason, I don’t look at the NASDAQ index as often, and I especially don’t look at the Nikkei as much as I should – it’s helpful to get a different perspective to clue you in to things you’re missing otherwise.

Corey Rosenbloom, CMT
Afraid to Trade.com

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6 Comments

6 Responses to “Nikkei and NASDAQ: History Being Remade?”

  1. abe Says:

    Corey, as said, it can be confusing too.

    A 'weird' question from looking at the charts – do you count the bear market as ending at the lows of October 2002 or at the lows of Mar 2003 ?

  2. P.K. Says:

    Great work as always. Equally interesting is the Naz from 2000 to the present with the Dow from '29 to its low in '38. If you set fib. lines from their peaks to troughs about 2 1/2 years later, their rallies into early '37 (Dow) and late '07 (Naz), both get above the 38% line but not to the 50% line before their steep drops and monster rallies that follow.

  3. AD Says:

    Corey, as said, it can be confusing too.

    A 'weird' question from looking at the charts – do you count the bear market as ending at the lows of October 2002 or at the lows of Mar 2003 ?

  4. hibernatin' Says:

    Great work as always. Equally interesting is the Naz from 2000 to the present with the Dow from '29 to its low in '38. If you set fib. lines from their peaks to troughs about 2 1/2 years later, their rallies into early '37 (Dow) and late '07 (Naz), both get above the 38% line but not to the 50% line before their steep drops and monster rallies that follow.

  5. Long Term View of the Nikkei Crash Which is Still Crashing | Penny Stock Trading System Blog Says:

    […] reader asked me to take a longer look at the Nikkei Index, which stemmed from my prior post “NASDAQ and Nikkei – Is History Being Remade?” The following post is an added to show that longer term perspective which shows a massive rise […]

  6. NEERAJ CHOUDHARY Says:

    get nasdaq app at http://play.google.com/store/a