Are the markets overreacting?
I think this huge sell off of Japanese stocks is clearly an 'aftershock' reaction. A sell off of this magnitude is in my opinion a little bit exaggerated, but it will take some time for investors to realize that. When that momemt comes we have to start looking for bargain stocks. At the moment we have to pay close attention to volume on the Japanese stock exchange. How much is being sold at a given time. And it seems to me, the downwards spiral has just begun. Unfortunately things will get a lot worse in Japan before they will get better. A global chain reaction is imminent.
Take a look at the Nikkei 225 index so far this week;