There's a massive bull market that no one is talking about

As the Dow Jones Industrial Average hit record highs Wednesday, another bull market is quietly raging on.

Japan's Nikkei reached a 27-year-high Tuesday as the yen weakened against the U.S. dollar. The Asian market index held close to those 1991 highs even after a decline during Wednesday's session.

Chad Morganlander, portfolio manager at Washington Crossing Advisors, sees a confluence of factors keeping this bull market rally going.

"You have an accommodative monetary policy, a continuation of a fiscal push, or fiscal stimulus, you have GDP expectations that are now being revised higher so these are all tail winds for the Japanese market," Morganlander told CNBC's "Trading Nation" on Tuesday.

While the short-term forecasts show upside, Morganlander is more cautious for the longer term.

"Over the next several years, they still have this structural issue of a reduction of their population, capital spend that's quite lackluster, and an indebted society," said Morganlander. "We would be overweight in the short run but in the long run we'd still be somewhat more pragmatic on this asset class."

The Nikkei's sharp run-up in the last few weeks has technician Frank Cappelleri wary of a pullback.

"Long term that breakout could be very meaningful. On the very short term, though, I would be a little careful," Cappelleri, chief market technician at Instinet, told "Trading Nation on Tuesday. "If you look at the EWJ, it was just up 7 percent in the last three weeks and that's [one of] the biggest move we've seen over that time frame since January right before a big fall."

From the end of 2017 to its January peak, the EWJ Japan ETF ran up 8 percent. Over the following two weeks, the ETF slumped 11 percent.

"Consider too that the EWJ itself is based in dollars so, at times, can move very differently than the Nikkei itself so there are some options available for investors on a hedge variety," added Cappelleri. "The HEWJ looks much more like the Nikkei. It's actually getting very close to its highs as well so I'd probably wait for a pullback and buy the breakout."

The HEWJ Japan ETF, which strips out currency fluctuations, is up 3 percent so far this year, while the EWJ ETF has risen 0.3 percent.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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