This chart looks at the Nikkei 225 index over the past 30-years on a monthly basis.
At this time the Nikkei index is attempting to break above its 1996 highs and it is testing the halfway point (50% retracement level) of the 1989 highs and 2009 lows at (2).
If the Nikkei index breaks out at (2), it will send a bullish message to this index which would spill over into hard-hit stock indices in Asia. If it should break out it would send a positive message to stock in the states as well.
What the Nikkei does at (2) will be very important for stock markets around the world. Keep a close eye on what this index does in the weeks ahead.
The iShares MSCI Japan ETF (EWJ) fell $0.25 (-0.43%) in premarket trading Tuesday. Year-to-date, EWJ has declined -2.42%, versus a 9.02% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.