February 6, 1995
Japanese Stock Market will Rally into 1997
Speech conducted by Mr. Martin Armstrong, Chairman of US Princeton Economic Institute
An investment seminar was held by Mr. Martin A. Armstrong, chairman of Princeton Economic Institute Inc., on February 1 in Tokyo. At the seminar, he said “There is a possibility of a stormy going in the Tokyo stock market in the first half of this year. But we will see a rally in the latter half of this year.” On the other hand, he forecasts the US stock market to reach at $5,000 – $6,000 by 1996, and the gold price to reach at $1,000 by 1998.
Mr. Martin A. Armstrong uses the artificial intelligence of computer, and he successfully forecasted the Black Monday in the US, the Nikkei’s historical high and the sharp decline of the Hang Seng index in the past. There are so many faithful supporters in his forecasting not only in the US but in Japan, and his opinion has strong influences..
The summary of the seminar is as follows:
- There will possibly be a turning point in the Tokyo stock market this year. Actually, the key targets in time remain February/March or June/July. Until then, there remains the risk that this market could drop to retest the support. Even if the market continues to move sideways until the third quarter of this year, it seems likely that the market goes into the recovery trend in 1996 – 1997. We see the reversals, which tell us the points to be bullish or bearish, as follows. A monthly closing above 21,000 Yen will signal a bullish reversal. A weekly closing below 17,242 Yen will signal a down trend. And in this case, it is possible that the Nikkei would retest the low of 1992. In the worst scenario, the Nikkei could reach at one more low in the 13,000 -12,000 Yen area. After that, the market will quickly recover. There is a short-term reversal at 18,818 Yen. A weekly closing above this level will suggest that the market will be stabilized for a short-term and then will turn to be bullish.
- The US stock market has potential to record a new high by 1996, as high as $5,000 – $6,000. It seems likely that the US stock market will outperform any other stock markets in the world from now on. It is because of:
- The recovery of corporate earnings caused by the restructuring
- The transfer of the funds from the bond market into the stock market
- The continuance of the prosperous condition of the US economy until the middle of 1996
And especially in 1996, the reappearance of the “Bubble” which was seen in Japan in the 1980s is possible in the US stock market. From now on, I would like to suggest to weigh the investment in the US stock market.
- Commodities generally seem attractive. Especially we expect a short rebound in the gold price. Gold is expected to increase to $1,000 per ounce by 1998 at least. And Australian dollar and the stock market is expected to move up, since they are commodity rich and the commodity prices seem to move up.