Global markets have been backed by investors who are cautiously optimistic, but with the shocking comments by President Trump, the most recent being a demand for US companies pulling out of China, the selloffs have taken many investors by surprise. Hedging has been challenging for many investors. The Japanese benchmark Nikkei 225 rose today but the feeling is that this index looks and performs well but there is no telling what will happen next. Here are some ideas.
1. Look at the index, mark the 20,200 and 20,000 level and monitor the buying and support interest just below market.
2. Also, focus on USDJPY at the 105.00 to 103.50 level. Any strong support on the downside of the USD and a reversal would underpin the index.
3. There are many stocks we looked at and they are still holding firm. Today autos started to show solid downside support and keep in mind that the tech and small caps that we liked are still interesting stocks to own as long as the downside holds and as mentioned, that 20,000 level in Nikkei 225 does not collapse and breach while the Yen is strengthening to 103.50. This combination would be a disaster.