Weak Tankan survey push Nikkei 225 lower

N225 Futures H1

We open the first day of Q4 2012 breaking below 8,900. Price was already looking heavy when we closed the previous week around Thursday’s low, setting a consistent “Lower Highs, Lower Lows” pattern the entire week. Hence it is no surprise that we saw market open gapping lower especially with Spanish Banks mostly failing the stress tests.

Tankan Survey results and China’s PMI didn’t help matters, but Nikkei 225 appears to be briefly supported by the downward trendline drawn starting from 23rd Sep 2012. L3 and Friday’s low will be significant resistance for any short-term rebound. A break higher back above 8,900 may signal a turnaround in sentiment especially if it’s backed by any significant bullish news release.

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