Edging Into Japan

Is it time to start looking at Japanese equities? I think it can be done after the big drop we've seen over the past three weeks. In fact, the Wisdom Tree Japan Hedged Equity (DXJ) -- my preferred method to exposure on the broad scale -- is down more than 20% from the high. I will go ahead and dip my toe into this position in a very measured way here. I view support levels as being the strongest in the $40.50-to-$41.50 area, but I'm seeing further support in several more areas, as indicated by the horizontal blue lines.

So here is my approach to the trade. I am long shares at $43. Furthermore, I have shorted June $46 calls at $0.60 for every 100 shares of stock. Next, for every 100 shares of DXJ, I added a long 1x June $42 put, short 2x June $39 put ratio trade for $0.45. My total cost into the trade is $42.85....203 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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