On March 22, 2021, we already reported the tight correlation of the worldwide stock markets…check our article. In our day-to-day comparison, we usually use the DAX; however, equities are not trading today in Germany due to a holiday.
Our correlation study shows a 74% correlation between the Nikkei and the S&P 500 development. Such, the Nikkei 225 functions as a potential forerunner for the S&P 500. By opening 12 hours ahead of Wallstreet, the Nikkei 225 is about 1.33-times more volatile than the S&P 500
The New York Stock Exchange (NYSE) and the NASDAQ are the largest stock exchange operators worldwide, accounting for 56% of the world’s stock value exchanged.
Nikkei 225 and US Exchanges Compared (1/2021, trill. USD)
With shares in the value of 6.4 trillion dollars exchanged the Japan stock exchange ranks the closest in size to the US exchanges. For building a correlation, we compare the sector share of the Nikkei 225 and the S&P 500.
The comparison graph shows similarity, where the major differences show in the sectors of Industry, Energy, Financials, and Consumer Discr.
Listing the Top-Ten Companies in the Nikkei 225, we see the following:
| Company | Sector | Share (%) |
| FAST RETAILING LTD | Consumer Discr. | 10,71 |
| SOFTBANK GROUP CORP | Communication | 6,86 |
| TOKYO ELECTRON LTD | IT | 5,96 |
| FANUC CORP | Industry | 3,35 |
| DAIKIN INDUSTRIES LTD | Industry | 2,74 |
| KDDI CORP | Communication | 2,51 |
| ADVANTEST CORP | IT | 2,46 |
| M3 INC | Health Care | 2,35 |
| SHIN ETSU CHEMICAL LTD | Materials | 2,30 |
| TERUMO CORP | Health Care | 1,95 |
Nikkei and S&P 500 Six-Months Compared
This week, the FOMC meeting with minutes at 2 p.m. Wednesday might hold the markets back until we get feedback from the FED about the monetary policy and economic outlook. Hence, we focus on shorter-term opportunities indicated by the NLT Timeless Trading Concept, where we simplify life for you, letting the chart will tell when to buy or sell!
Here an example:
E-Mini S&P 500 NLT Timeless Chart April 1 to 5, 2021
The system highlighted multiple long-trading opportunities along with the price move on April 1, 2021. At 6 a.m. ET, our NLT Top-Line shows a Purple Zone: a sign of directional price ambiguity.
Each confirmed trading opportunity stood for a price change of about $450 of the underlying Futures contract. Our charts display on thinkorswim of TD Ameritrade, while most of our day traders execute orders on Ninja Trader due to favorable margins associations.
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