The 2014 CLSA Feng Shui report is finally out. The report has a few sections but two sections are of particular interest to me and other investors alike - the monthly Feng Shui forecast on the stock market (Hang Seng Index) and the Feng Shui influence on each of the sectors in 2014.
The CLSA Feng Shui report makes a bullish forecast for 2014 in general. The Year of Horse is likely to kick off with a strong showing in February. In March and April, markets are likely to remain range-bound before enjoying another strong uptrend in May. According to the report, the month of May is where the bull is likely to be as strong as February, if not stronger.
I am not surprised that the report was bullish on the Hong Kong stock market for the months of February and May. February is not only the start of new Lunar Year but is also marked by a combination of Flying Stars in the Northeast which embodies wealth creation. In my earlier post on Feng Shui and Stock Market Forecast 2014 - Timing Stock Market Correction in 2014, I mentioned that the most auspicious months for the U.S. stock market in 1H2014 are March and May. April is average at best while February and June are vulnerable months where US stock market might experience a correction.
The CLSA Feng Shui forecast is slightly different from mine, which is not surprising since the methods on which our forecast are based are different. Moreover, while my forecast (and focus) is on the US stock market, the CLSA Feng Shui forecast is made on the Hong Kong stock market.
Personally, I am more bullish on global stock markets for the month of March than CLSA Feng Shui forecast suggests. As regard to February, while the flying star combination residing in Northeast (where Hong Kong is located) symbolises wealth-creation, the flying star combination in Northwest (where U.S. is located) is not auspicious. Therefore, I remain guarded on on the prospects in February. A correction on the US stock markets will not be good for the Hong Kong stock market - thus my caution for the month of February. Having said that, I am not downright bearish for the month of February because it is after all the start of a new lunar year - a year which is marked by more auspicious than inauspicious stars.
One forecast which we both seem to agree on is for the month of May. From Feng Shui point of view, it is not difficult to be bullish for the month. Virtually all the stars in the different sectors form an auspicious combination. In particular, the Northwest sector will see Star No 4 visiting which forms a Metal combination with Period Star No 9. The resulting Metal will reduce the negative effect of Annual Earth Star No 5 and further strengthen the inherent Metal element of Northwest sector. As for the Northeast sector, the month of May will also have wealth Star No 6 visiting. The only negative aspect is that the monthly Star No 6 will clash with Annual Star No 7. However, this combination, inauspicious as it is, will only strengthen the Metal element in that sector and when combined with the Earth elements present in the Northeast will produce more wealth. May is likely to see some heightened political conflict involving the two Korean nations or China and Japan. Despite the negative news flows on the geopolitical front, stock markets are likely to ride a wall of worry on a firm and strong uptrend.
The CLSA Feng Shui report makes a bullish forecast for 2014 in general. The Year of Horse is likely to kick off with a strong showing in February. In March and April, markets are likely to remain range-bound before enjoying another strong uptrend in May. According to the report, the month of May is where the bull is likely to be as strong as February, if not stronger.
I am not surprised that the report was bullish on the Hong Kong stock market for the months of February and May. February is not only the start of new Lunar Year but is also marked by a combination of Flying Stars in the Northeast which embodies wealth creation. In my earlier post on Feng Shui and Stock Market Forecast 2014 - Timing Stock Market Correction in 2014, I mentioned that the most auspicious months for the U.S. stock market in 1H2014 are March and May. April is average at best while February and June are vulnerable months where US stock market might experience a correction.
The CLSA Feng Shui forecast is slightly different from mine, which is not surprising since the methods on which our forecast are based are different. Moreover, while my forecast (and focus) is on the US stock market, the CLSA Feng Shui forecast is made on the Hong Kong stock market.
Personally, I am more bullish on global stock markets for the month of March than CLSA Feng Shui forecast suggests. As regard to February, while the flying star combination residing in Northeast (where Hong Kong is located) symbolises wealth-creation, the flying star combination in Northwest (where U.S. is located) is not auspicious. Therefore, I remain guarded on on the prospects in February. A correction on the US stock markets will not be good for the Hong Kong stock market - thus my caution for the month of February. Having said that, I am not downright bearish for the month of February because it is after all the start of a new lunar year - a year which is marked by more auspicious than inauspicious stars.
May - Strongest month for global markets?
One forecast which we both seem to agree on is for the month of May. From Feng Shui point of view, it is not difficult to be bullish for the month. Virtually all the stars in the different sectors form an auspicious combination. In particular, the Northwest sector will see Star No 4 visiting which forms a Metal combination with Period Star No 9. The resulting Metal will reduce the negative effect of Annual Earth Star No 5 and further strengthen the inherent Metal element of Northwest sector. As for the Northeast sector, the month of May will also have wealth Star No 6 visiting. The only negative aspect is that the monthly Star No 6 will clash with Annual Star No 7. However, this combination, inauspicious as it is, will only strengthen the Metal element in that sector and when combined with the Earth elements present in the Northeast will produce more wealth. May is likely to see some heightened political conflict involving the two Korean nations or China and Japan. Despite the negative news flows on the geopolitical front, stock markets are likely to ride a wall of worry on a firm and strong uptrend.
Fed to pause tapering in April's FOMC meeting?
May is typically a tricky month for stock markets in general. The "Sell in May and go away" mantra is not without historical evidence. Nonetheless, for 2014, May is likely to be a good month (best in 1H2014). What might cause the strong rally in May is anybody's guess. If I were to make a guess, it is likely to be a pause in the tapering of bond purchases by the Fed in their FOMC meeting on 29-30April. This should provide a positive uplift to the global stock markets. Another possibility is an interest rate cut by the China Central Bank or a stimulus measure undertaken by the chinese government in response to the economic slow down. Typically, January and April tend to be tricky months for the China stock market in the past as investors anticipate a rate hike just days prior to the Lunar New Year or before the long summer holiday in China begins in May. (Central bankers like to hike rates before a long holiday or weekend to soften the impact of the rate hike on financial markets). If global economy slows down in tandem or stock markets undergo a nasty correction in April, it is possible that the governments or central banks "get together" to stimulate the global economy again.
I personally think that plantation and soft commodities will perform well this year but I am not sure about retail or technology. Though I agreed that this year favours sectors which are associated with Wood and Fire, these two sectors have performed rather strongly in the last two years. I would rather choose energy sector particularly, natural gas-related， renewable energy-related and LED sectors. In my opinion, they offer better value and more upside to investors in 2014.
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Bullish on Plantation, Soft Commodities and Technology
The CLSA Feng Shui team is bullish on sectors such as plantation, soft commodities, techonology, transport and retail and bearish on sectors such as resources and property. I agreed with most of their bullish views and their bearish view on property. As for resources, I am more bullish because of the confluence of the auspicious flying stars in the metal mining regions such as South Africa, Mexico and Peru. I understand where their bearishness on the sector comes though - this is a strong Fire year and Fire destroys Metal. But I will be happy to stick with my view because I also believe that the recovery in the global economy will spur more demand for the industrial metals.I personally think that plantation and soft commodities will perform well this year but I am not sure about retail or technology. Though I agreed that this year favours sectors which are associated with Wood and Fire, these two sectors have performed rather strongly in the last two years. I would rather choose energy sector particularly, natural gas-related， renewable energy-related and LED sectors. In my opinion, they offer better value and more upside to investors in 2014.
PS: If you like my article, I will greatly appreciate if you could FB like, G+1 or share it. Thanks. :)
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