Japanese Stocks Continue To Fall

The weakest stocks today were the Japanese stocks..I like to follow the iShares symbol EWJ...Notice in the above chart we have the $SPX in red and the EWJ in black..It's clear that Japanses stocks (EWJ) are much much weaker than our market (SPX).. If you look at the lower panel you will see a ratio line of EWJ divded by SPX..This line is a relative strength line because it compares one market with another...Notice at the beginning of November how weak the ratio line was. In fact the line was breaking below the Jume lows while EWJ prices were much higher than the June lows..This was a very bearish sign and it's not a surprise that EWJ is falling now...The ratio line continues to be weak which tells me to favor shorting rallies looking for EWJ to retest the June lows.