Nikkei Futures (NKD/Nikkei 225) Inverse Cup and Handle

Nikkei futures have setup an inverse cup and handle on the daily. A somewhat rare pattern as most of them turn into double bottoms or sideways consolidation. Maximum downside target for the pattern is 21,000

- Global macro trends continue to worsen
- BOJ stuck between saving the Yen and helping the dollar
- Japan economic fundamentals may allow BOJ to allow inflation to run hot
- Possible US recession could spread around the world
- Yen carry trade still in play although most likely only blows up in catastrophic situation
- Japan has seen the benefit of US monetary and fiscal policy, Trump admin likely to try to pressure Japan into spending money on US goods such as food and weapons

Overall sentiment on NKD is that it has followed US markets especially the Nasdaq for some time. DXY moving up takes pressure off the Yen carry but could be a sign of now US firms taking profit on a very large run up in the past few weeks. Regardless of outcome, volatility is expected.