The Nikkei is getting destroyed

Business Insider | 2/5/2018 | Sam Jacobs, Business Insider Australia
TimHyuga (Posted by) Level 3
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The Nikkei index has slumped in early trade after Japanese markets opened at 11:00am AEDT.

The declines follow a drop of 8% in Nikkei futures this morning, after US stocks had their largest one-day points fall in history.

Stocks - Australia - South - Korea - Time

Stocks in Australia and South Korea are sharply lower and a short time ago, the Nikkei 225 index was down more than 4.5% — decline of over 1,000 points:

It marks a sharp correction for Japanese stocks, just a few days after trading at near all-time highs.

Nikkei - % - High - Points - January

The Nikkei has dipped by more than 10% from its recent high of 24,124 points reached on January 23 — indicating the market is now in a technical correction.

Chris Weston, chief strategist at IG Markets, said it’s “not looking good”, with the selloff in global stocks stemming from a rise in volatility.

Trade - Year - Investors - VIX - Measure

“The trade of the year in 2017 among institutional investors was selling the VIX – a measure of volatility — and that formed the basis for big investment flows,” Weston said.

The Cboe Volatility Index consistently traded near record lows in 2017 at a reading of around 10, but spiked overnight to a reading of 37.

Volatility - Players - Position - Selling

“Now volatility has risen, big institutional players have been forced to reverse their position which has acted to exacerbate the selling.”

From a technical standpoint, AxiTraders’s Greg McKenna said the Nikkei has now broken through key support levels.

Today - Fall - Nikkei - Bottom - Range

“With today’s fall the Nikkei has broken down and through the bottom of the range it was...
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