With a close at 15388.72, the Nikkei 225 is held by the 1 year average at 15094.58. But viewed longer term, particularly the October 2008 close at 8512.27, the Nikkei had a run of 6876 points in 6 years. October 2014 marks the 5th consecutive month the Nikkei closed above 15,000 and 7 times in the last 12 months. When last the Nikkei closed above 15,000 was the period between 2005 - 2007. Then closes ranged from 15307. 78 lows to highs at a first ever 10 year price of 18138.36.
The Nikkei and USD/JPY are overbought and could use a correction but correlations run 50%. A Nikkei break below 15290.31 would test the 15094.58 one year average. A break below the average targets 14981.75, 14940.67, 14898.84 and 14703.10. The Nikkei from current price is in a long term uptrend as long as 14440.60 holds. Target on the one year average is 15675.40 and longest average 15422.67. Near term, the break above 15486.05 would delay shorts since that point begins a new distribution of higher prices. What stops shorts is a balanced to overbought price on the 1 year average. The way forward is sell rallies.
USD/JPY On the downside, a break below 107.84 targets 106.48, 105.09, 104.96, 104.34 and 103.52. Price above 107.84, targets 108.00, 108.10, 109.34, 109.52, 109.90 and 110.82. USD/JPY failed to clear the upper 109 hurdle October 5th and subsequently slid to 105.20 lows based on US Retail Sales October 15th. Opposite the Nikkei, current USD/JPY price is overbought short term and oversold long term. The way forward is long on any price drops.