Nikkei Suffers 9% Drop - More Downside or Liquidity Vacuum? May 23rd

liquidity vacuum price action order flow nikkei 225

Nikkei 225 – 1500 point drop followed by small recovery
Yesterday the Nikkei 225 suffered one of its biggest % drops in a year, shedding over 1500 points via a 1-2 punch from the weak China PMI along with the Abe-nomics plan failing. The index lost two weeks of ground in a single day.

Normally in such cases, I’d be uber-bearish, but I don’t expect a major trend reversal (just yet). In fact, after some short term selling, I’m expecting a resumption of the uptrend.

Why? 3 Reasons

1) Very much like in 1987, the index had an 89% rally over 186 days followed by a 9.1% correction over 6 months. This last run was 191 days over …

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