Old Masters Market in Japanese Candlesticks: 1998-2014
In Japanese Candlesticks, 1998 was a classic Doji gravestone. The Doji gravestone represents buyer weakness with diminishing strength in the latter part of the year – the closing level mirroring the opening level.
It often prefigures a decline.
In effect, 1999 closed below 100. The year 2000 saw a slight recovery, but it was short-lived and the year 2001 closed at a new low.
After this delicate sequence, the market recovered in 2002, with
confirmation in 2003 in the form of a white Marubozu and a closure above 120. In 2004 the market developed a spinning top structure indicating a mixed environment.
However, there was a further upward movement in 2005 with a higher closure: another white Marubozu representing strong buyer appetite.
2006 and especially 2007 saw profit-taking with a support just above the 120 threshold.
We must remember that in our last on Contemporary art market guide, 2007 was a white Marubozu formation.
In 2008, the Old Masters Market rejoined a strong growth path with a white Marubozu, while the Contemporary Art market started a strong contraction.
However, the Old Masters market contracted in 2009 and 2010, while the Contemporary art market limited its losses.
The Old Masters 120 support line was breached taking it back to 2003 levels, while the 2010 closing level for the Contemporary art market was higher than its lowest level in 2007.
A jump in 2011 led to a return above 120 by year-end.
2012 and 2013 saw two years of decline, perfectly mirroring the contraction on the Contemporary Art Market
2014 is looking like a hesitant year – the candle is long – with a low corresponding to 2001 and 2002 levels. However buyers have since returned to the Old Masters market.
Are they influenced by the dynamism of the Contemporary art market, or do they consider it is time to take position on a market that seems less agitated than the Contemporary art market? Is it a leading indicator of future weakness on the Contemporary art market ?
Our feeling is as follows: if one were to equate the Contemporary art
market to a particular kind of stock on the stock market, it would be a growth stock, whereas the Old Masters’ market has a much more defensive profile.