The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- At The FRED Report ( www.thefredreport.com), we have been asked so many questions about the Japanese Markets in light of recent events, from a technical point of view, that we felt, with some trepidation this week's article should be on this subject. Our readers should know I lived in California for nine years, received my graduate degree from UCLA, and during that time experienced several earthquakes -- although obviously nothing of the magnitude that has hit Japan. So this event is a bit personal for me as it touches close to home. Our hearts go out to the victims of this incredible disaster. We follow two basic ETFs that cover the Japanese market. These are the iShares MSCI Japan Index Fund ( EWJ) and the Japanese Smaller Capitalization ( JOF). . We use the EWJ as our proxy for large-cap Japanese stocks, and the JOF for smaller-cap names. Right now, we are more interested in larger-cap Japanese names, because Japanese multinational corporations have facilities outside of Japan. In addition, chart analysis of the two ETFs shows that EWJ is outperforming JOF. We show the two monthly charts below. Our position, as discussed in The FRED Report Weekly letter has been, and still is, that as long as the EWJ holds the 10 area Japanese stocks should likely chop around and build a base, but ultimately rally. We have suggested that the JOF, although less attractive, could be purchased by traders in the 8.40 - 8.50 area, and this still seems to be the case. We are using these areas as CLOSING BASIS prices because volatility is high. We show daily charts of Japan below. So far, these areas seem to be holding. Another way to invest in a Japanese recovery is through ADRs (American Depositary Receipts) of Japanese securities that trade on the NYSE. Several large Japanese multinationals have ADRs. Our two favorites are Honda Motor Company ( HMC), and Sony ( SNE). Readers should realize that the problems in Japan are not over, and that the effects of this tragedy will be with the world for months, possibly even years. For this reason, awareness of your risk tolerance is paramount, when looking at this volatile area of the world. Realize a period of base building would be normal market action after this kind of market volatility. We hope that this article can serve as a guide for those concerned with Japanese market volatility over the next few weeks.