Speaking of expanding diagonal triangles, Japan’s Nikkei 225 is, I believe , a great example. Here is is once again using a semi-log scale chart;

You do not have to go all the way to the lower trend-line. More often than not it does not even get close. But you should get a 3-wave move in this 5th leg down (as well as the others). A low below 6994 would achieve that. Perhaps 5000?? It is down about 2000 points since the first time this formation was presented, at a time when the market was pretty gang-ho on Japan.

The Japanese economy has just been downgraded, and the central bank keeps intervening to keep the Yen down with very little result. The population has stopped growing and is now shrinking at an alarming rate. Government debt is the highest anywhere in the world at about 220% of GDP, which supposedly does not matter as they own it to themselves. Who knows, anything would seem possible.

Japan recently intervened in the currency market. The Yen , like the Swiss franc is so high that industry is getting killed. For at least two years now I have presented a scenario for the Nikkei 225 that is particularly dreadful. One would hope it never comes to this but this is simple an EW interpretation. Here are updated charts;

There are at least 15 other entries, so feel free to look at them. The above chart is arithmetic , it calls for a low below zero and that may be possible for deposits at Mellon bank in New York, but not for equities, not even in Japan. So we will use the semi-log chart;

Problem solved, we will not go to negative values , but we may go to, say 3000 or below. This is a standard “expanding diagonal” pattern. If correct , it does not bode well for Japan. But, on the optimistic side , if you care to put it in such terms, after the low is in it will have a violent upswing. As always, time will tell.

There are alternative EW counts, but few that are as credible as this one, and as incredible as it may sound, once upon a time, just 21 years ago, the Emperor’s  Tokyo palace  grounds were supposedly worth more than the state of California. In these times, anything is possible.