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The Nikkei in Japan lost another -2% overnight closing down at 13,334. Fundamental and quantitative factors in Japan continued to break down this week. Yes, I know Japan is “cheap”, but I also know that this is still the world’s 2nd largest economy, and that it wont be forever. With each passing day, the Japanese government puts themselves in a higher probability position of losing global market share.

I highlighted yesterday’s abysmal export data released by Japan, so I won’t rehash that note. I will however remind you that this is an island country that continues to pander to the socialist demands associated with economic stagnation and deteriorating population growth.

The Nikkei is broken. I have a near term downside target of 12,501.

*Full Disclosure: I am short Japan via the country ETF (EWJ)
KM
(chart courtesy of Stockcharts.com)