DXJ Forecast + Trading Strategies


Bullish Case: Japan's recent economic policy changes and currency weakness could drive DXJ higher, leveraging its hedged structure and expected increases in domestic equity investments. Market confidence from NISA contributions may sustain upward momentum.


Bearish Case: Potential global economic headwinds, geopolitical risks, or shifts in U.S. monetary policy could trigger sell-offs in Japanese equities, leading to a decline in DXJ. Moreover, the current flat volatility suggests subdued investor sentiment.


Potential Outcomes:

1) Continued rally to $115 (+5.3%) due to favorable sentiment, 45%.

2) Consolidation around $110 with volatility in the range, 40%.

3) Drop below $105 (-4.2%) driven by external shocks, 15%.


Trading Oracle: Implement a bullish debit spread by buying the $110 call and selling the $112 call for August expiration. With implied volatility peaking for near-term options yet tapering afterward, this strategy optimizes risk-reward while capitalizing on expected price stability and moderate gains.


July 25, 2024


WisdomTree Japan Hedged Equity Forecast

DXJ      WisdomTree Japan Hedged Equity











Correlated Assets

Assets that tend to move strongly with DXJ



GDDY Forecast + Options Trading Strategies   GDDY  Godaddy (0.95)


BSX Forecast + Options Trading Strategies   BSX  Boston Scientific (0.95)


SPOT Forecast + Options Trading Strategies   SPOT  Spotify Technology (0.95)


VST Forecast + Options Trading Strategies   VST  Vistra (0.95)


MMYT Forecast + Options Trading Strategies   MMYT  MakeMyTrip (0.95)



Uncorrelated Assets

Assets with little price relationship to DXJ



GPC Forecast + Options Trading Strategies   GPC  Genuine Parts (-0.0)


BILI Forecast + Options Trading Strategies   BILI  Bilibili (-0.0)


ADC Forecast + Options Trading Strategies   ADC  Agree Realty (0.0)


BC Forecast + Options Trading Strategies   BC  Brunswick (-0.01)


PNW Forecast + Options Trading Strategies   PNW  Pinnacle West (0.01)



Anticorrelated Assets

Assets that tend to move strongly against DXJ



SAVE Forecast + Options Trading Strategies   SAVE  Spirit Airlines (-0.93)


CMP Forecast + Options Trading Strategies   CMP  Compass Minerals International (-0.93)


VIXY Forecast + Options Trading Strategies   VIXY  ProShares VIX Short-Term Futures (-0.95)


MED Forecast + Options Trading Strategies   MED  Medifast (-0.95)


VXX Forecast + Options Trading Strategies   VXX  iPath Series B S&P 500 VIX Short-Term Futures (-0.95)





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