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Interested in technical analysis using Point and Figure charting, Bullish Percentage Index, on major markets, indices and sectors. Write and test new systems using several long/short strategies using ETFs and mutual funds.
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  • Tale Of Two Instruments – Same Market Different Daily Returns 0 comments
    May 13, 2013 3:53 AM | about stocks: FXY, DFJ, NKY

    Nikkei 225 Index

    The iShares MSCI Japan Index ETF opened 1% down and closed unchanged.

    The Nikkei 225 Index closed up almost 3% previous night.

    So what happened ???? Why is the Japan ETF so much out of sync compared to the Nikkei 225 Index ?

    In this chart, FXY is proxy to the Japanese Yen. We can see that in the one month period, Nikkei 225 Index jumped up by 17.82%, but then Japanese Yen has fallen 7.33%. Since the ETF EWJ is represented in US $ terms, it is able to rise only 8.89%. Its underperforming the Nikkei 225 because the dollar is gaining strength vs the Yen.

    Disclosure: I am long DFJ.

    Stocks: FXY, DFJ, NKY
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