Over the past 24 years, the Nikkei 225 has found a price level that's very hard to break free from. Below looks at the Japanese index on a monthly basis for the past 30 years.
Line (A) comes into play around the 20,900 level. Since the early 1990s, the majority of the times it hit line (A) at each (1), the Nikkei ended up creating an important high. On 5 different times, the Nikkei has hit this level at (1) and peaked. Those peaks were important to the Nikkei and other global indices.
As the Nikkei is testing long-term horizontal resistance, EEM and EFA are doing the same.
What the Nikkei, EEM and EFA do at these important breakout levels will be important to each asset and the broad market in the states. If October is to repeat as a strong seasonal month again, upside breakouts in these key assets need to take place.