Feb 6, 2016

How Accurate is Feng Shui in Predicting the Stock Market?

The January crash started without warning and strike on the first trading day of 2016, sending shock waves around the world as the China's stock market fell by the stock exchange circuit breaker limit of 7%. Oil prices, pressured by a combination of slowing demand, rising supplies and a rising USD fell below 30 dollars, added another layer of pressure on the financial markets. The central banks around the world, worried by another potential bout of potential deflation and economic slow down due to the falling oil prices and stock markets, reacted by promising to unleash another round of monetary easing and the rumbling of the markets cooled some what.

The brutal fall of this crash has been swift and surprising with little indication of it happening. The question is, can we turn to the ancient art of Feng Shui to help us predict the fall before it happened? How accurate Fengshui has been predicting the stock markets in the past few years? Using the CLSA Feng Shui Index developed in Hong Kong for the prediction of the Hang Seng Stock index, we compared CLSA index with the stock market. Take note that the CLSA index lags one month as compared to the normal calender year due to the calculation of the Lunar ca lender.

2015 Accuracy Prediction: 40%

The Index got the general pattern correct but got the overall trend wrong with the CLSA index predicting a positive to the stock market while the HSI returned negative. The index is much more accurate in predicting the US stock market which actually has a 70% accuracy prediction

 



 2014 Accuracy Prediction: 85%

Horse is one of the most straight forward character in the Zodiac and whatever your see if whatever your get. The prediction is almost spot on!


 2013 Accuracy Prediction: 20%

The slippery snake is hard to predict and the index got most of the trends totally off. It did get predict a sharp correction, although the month which occurred was totally off so I gave some sympathy points for that...


Prediction for Year 2016?

We will have a relief rally after Chinese New Year followed by a "All shit breaks lose" crash with the bottom being reached at June. The market will end up flat by the end of the year. So if you are holding on to some loss making stocks, you should unload them during March and hold onto your cash till June. 


Portfolio Strategy

I have written much about my plan for the year 2016 and I still maintain my negative stance for the year. However, I personally feel that the current market correction whereby oil and stock prices have almost perfect correlation to be a prelude to something bigger down the road. I expect some relief rally in the next few weeks, whereby we will unload all our holdings and hold on to cash while sitting out on the volatility. At least that is something which I agrees with the CLSA prediction!

The portfolio is down 5.96% for the month and our allocation into Europe has buffered us from most of the losses incurred by China and the emerging markets. The European markets performed the best during the month and the sharp rise in USD allows our cash holdings, which is mainly in USD to mitigate some of the losses. I will look for opportunities to exit our aggressive position in the near future as the market rallies from the recent low and stay low for the rest of the year until opportunities arise again.



21 comments:

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  4. Well this is fun to look at but I sure hope no one is taking it seriously, haha. The markets correlate with all sorts of things all the time, so just because they happened to correlate with Chinese astrology one time doesn't mean there's any magic there - but hey don't let me stop you if you wanna risk your money on astrology ;)

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    1. It's for fun:). So far, 2016 prediction hasn't been panning out as planned based on the Fengshui Chart. Haha

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