The Nikkei daily chart seems to build an inverted head and shoulder formation. The Nikkei may produce with the Seq 13 a right shoulder at 8000, which should trigger a substantial rally thereafter to 11000. As the Nikkei made new 20 year lows, the capitulation was more like I would have expected it for US markets with a reversal week from those lows.The situation in Japan/Asia looks a bit different compared to the USA. Going forward as the deleveraging is done for now, the Yen will drop sharply as it rose purely as a matter of closure of carry trades. That will give Japanese companies a far better competitive situation - the only point for foreign investors will be to hedge the currency as you go long.
US markets are trading in a very tight range now for 4 hours - it's a consolidation day the bad news of today was already priced in and market participants seem to wait for the speech of President-Elect Obama to get some clues.
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