NIKKEI

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GENERAL OVERVIEW OF MARKET

ISSUE DATE: MAY 15, 2006

Nikkei is showing signs that it is being dominated by directional line D1. The major top was almost made at its junction with IC2. Therefore, we would expect Nikkei to fall to C1. From there, provided price can stay above C2 we can expect a rally back to target 2, up the three directional lines adjacent to D2. However, if the two C lines do not hold price and C2 is broken on the downside, a further fall to target 1 is highly likely. That target looks extreme, to be sure, but at this stage of Nikkei's long term cycle sharp initial falls from cycle tops are common.