Is the Nikkei Sending Us a Warning?

It is remarkable that the S&P 500 Index (SPX) defies gravity even after bumping up against its convergent upper-channel lines from the Nov 2012 and Oct 2011 lows, while we see (in the chart) that the Japanese Nikkei has plunged into a 15% correction in a matter of just a few trading days.

Is the Nikkei a warning to US investors that even though the BOJ is committed to intense QE, a meaningful bout of profit-taking can still emerge?

In the past week, the Nikkei has declined from 15,943 to 13,589, or by 15% in the aftermath of its run-up of 85% (!!!) in the past 6 months.

Important and supposedly strong support should reside at 13,185 to 13,100.

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