Tuesday, January 26, 2010

Japan Downgraded - Time to Buy!

S&P downgrades Japan - Why this is a time to buy!

Moody's and The Bovespa - 2002

Brazil almost went bankrupt in 2002. In 2002, many of the international financial agencies were downgrading Brazil in many ways - many blamed the debt uncertainty because of a socialist/leftist candidate named Lula da Silva and the possible negative economic implications if he were to win the election - well he did win and so did Brazil.

Article: Moody's Downgrades Brazil Debt Article.

And this is what the stock market did after the debt downgrade and the election of a socialist.

Today: S & P and Japan!!

S & P downgrades Japan's Credit Rating Article.

Here is a chart of the Nikkei 20yr.

The Nikkei has been drifting lower for twenty years - the chart looks to have double bottomed and this could be a place to park some cash as markets around the world continue their correction. Let's see where the Nikkei is 3-5 years relative to world indices. Here are some charts of MTU, MFG, and NMR.

Note of warning: when these type of media events take place, the volatility will naturally increase so expect some "whipsaw" action.




Use any weakness to start accumulating Japanese banking stocks and any other stocks that have good technical signals. I will now scour Japanese stocks for new bargains, etc. This will be a volatile time so manage and strategize your approach.

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