Asia Kabushiki Shinbun – January 9, 1997

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January 9, 1997

1997 is a Panic Cycle Year for the First Time in 66 Years

Our newspaper urgently did an interview with Mr. Armstrong who is the most famous analyst all over the world about markets in 1997.


He is 47 years old. He has been appointed as a top economist in the US by the Equity in 1990. He had presented the report investigated about the reason of the Black Monday to the Brady committee, and advised Reagan and Bush during their being the President of the US. His funds make marvelous profits of 30.05% on the average for the principal between 1991 and the last day of March 1996 (on the Japanese yen and excluding commission basis). Recently he was just carried in this newspaper on October 10, 1996. He took the bull position during the US shares’ producing a new peak point, with the result that he proved his prediction precise to the people once more.

The foreign exchange and the Nikkei started with a storm in this year. How should we, private investors, survive in this stormy time? So, our newspaper, The Stock Journal, as a new year special did an exclusive interview with Mr. Martin A. Armstrong, who is the chairman of Princeton Economics Institute Inc., as one of the most famous technical analyst all over the world.

Mr. Armstrong pointed out, “1997 is a Panic Cycle Year for the first time in 66 years,” and “a new age starts in the foreign exchange and the Nikkei.” He recognizes the situation of this bearish market as the preparation for the Nikkei to reach at 32,000.


The Beginning of a New Age

For the first time in 66 years since 1931, our computer models have targeted 1997 as a Panic Cycle Year when volatility is very high. It is showing up particularly in the foreign exchange markets. Higher volatility in the foreign exchange will cause to increase volatility in most capital markets due to the high correlation of investment trends with that of the foreign exchange. For this reason, 1997 appears to also mark the beginning of a new age of increased volatility worldwide which will not reach its peak until 2003.

The Outlook for the Nikkei

The Nikkei closed weak but neutral for 1996. The market was unable to move above our major resistance at 23,000 and now support becomes critical at 17,242 during 1997. A penetration below 17,242 warns that our maximum target objective of 11,500 – 12,500 can be reached in 1997.

Key targets for a low will be February/March and June. A weekly closing below 19,162 will warn that a drop to the mid-17,000 area becomes possible. If the 1996 low is penetrated (18,819), then a further decline is possible.

However, a decline into June warns that the second half of the year will produce a strong rally which could carryover into 1998. A rally in early 1997 into June warns of a sharp decline into 1998. During the 6 years between 1998 and 2003, we will see the best potential for a major recovery back to 32,000.

The Outlook for the Dollar to the Yen

During 1997, the immediate trading range will be 118.10 – 113.45. The maximum trading range for 1997 will be 134.00 – 103.50. Our computer has correctly forecast the low for the dollar and it now is forecasting a rally up to the 145.00 level going into the end of this century. The key resistance will be 118.45 on a weekly closing basis and 118.75 on a monthly closing basis. Exceeding both of these levels would then raise the potential for a rally initially up to the 125.00 area and eventually up to 134.00. Any decline which holds 113.45 will signal a strong rally in the near future is very likely.