Understandably, traders are looking for ways to play the inevitable rebuild of the wrecked towns in Japan. Of course, how you play it is the most important issue. The key is to not delude yourself into thinking that your thesis is foolproof and simply must work. The market is the final arbiter, despite if everyone nods their heads in agreement at your ideas over cocktails. Indeed, Mr. Market is not a “yes man.”
Therefore, selecting your “Japan plays” without regard to price action and volume patterns is pure hubris, with you presupposing that the market will eventually come around to your point of view. My preference is to look for plays that I would have actually considered going long whether or not the disastrous events in Japan had ever unfolded. Weyerhaeuser Company, the second largest timber company (behind PCL) founded by this badass is sporting a technically sound chart, and clearly meets the threshold for playing Japan like a samurai warrior trader. See my notes on the daily chart below.
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