May 10, 2013:
I do not see any chances of there being a bubble in the Nikkei Index at this time. Although, there appears to have been a recent bubble.
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| Figure 1 |
Figure 1 produced with C++ code. Nikkei Index. Seven year window of data. Every data point is a new week. Every peak in the market is represented by a red vertical line.
1. June 24, 1996 – followed by a 23.2% drop
2. May 20, 2002 – followed by a 35.7% drop
3. September 29, 2008 – followed by a 34% drop
4. March 29, 2010 – followed by a 20% drop
5. March 12, 2012 – followed by a 16.7% drop
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| Figure 2 |
Figure 2 produced with C++ code. Nikkei Index. Six year window of data. Every data point is a new week. Every peak in the market is represented by a red vertical line.
1. May 1, 1995 – followed by a 15% drop
2. November 18, 1996 – followed by a 18% drop
3. September 17, 2001 – exact bottom of downturn (or perhaps related to Sept. 11, 2001)
4. March 29, 2010 – followed by a 20% drop
5. March 12, 2012 – followed by a 16.7% drop