The S&P 500 versus the Nikkei 225 - The Upside Always Beats the Downside

Buying on the upside always beats buying on the downside. The following Complete Trading Model (CTM) analysis compares the performance of the S&P 500 and the Nikkei 225 from January 1984 through September 2004. The S&P 500 was on the upside from 1984 until it peaked in 2000.

On the other hand the Nikkei 225 peaked in 1989 and then entered a long-term downside.

S&P 500 Goes Green

All of the green in the CTM percent returns chart for the S&P 500 shows that buying on the long-term upside is profitable as 91.5% of the buy and sell combinations were winners. The red area of losing buy and sell combinations is associated with buying and selling around the 2000 market peak.

The CTM winners and losers map shows the winning and losing buy and sell combinations looking at the CTM percent returns chart from the top.

The Nikkei 225 is in the Red

The CTM percent returns chart for the Nikkei 225 show the outcomes of buying and selling on a long-term downside. Only 33 percent of the buy and sell combinations were winners (green). The large red area shows the 67 percent of losing trades.

The winners and losers map vividly shows all the losing buy and sell combinations (red).

The Nikkei 225 Trailed the S&P 500

As you would expect, the S&P 500 out performed the Nikkei 225 most of the time from 1984 to 2004. The next chart shows the difference between the percent return of each Nikkei 225 and S&P 500 buy and sell combination. For the entire period 87 percent of the Nikkei 225 buy and sell combinations underperformed the same buy and sell combinations for the S&P 500. The Nikkei 225 outperformed the S&P 500 until the Nikkei 225 peaked and then again for brief periods after the S&P 500 peaked in 2000.

The large red area shows had badly the the Nikkei 225 trailed the S&P 500.