Just like its cousins in the US, the Nikkei has had a really strong rally in recent days. The SPX is charging towards 2500, while the Nikkei is firmly on track to take out 20000.

It was only a matter of days ago that we were looking at a potential break of the 19300 level. Once again that support level held up as it has done for us on a number of occasions.

Nikkei – 240 min Chart

Look out Above

Yesterday I wrote about how I was looking for a test and break of the 19800 level. Sure enough, we powered through and have taken out that resistance level. It now looks like we will consolidate in this range and potentially try and take on 20000.

I think this offers a reasonable risk/reward at the moment and is also being helped by the fact that the Yen has been weak, after retracing all the way back above 110.00 after the flight-to-safety that we saw at the end of last week.