Feng Shui and Stock Market Forecast 2014 - Timing Stock Market Correction in 2014

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In my post on Feng Shui and Stock Market Forecast 2014, I have made my forecast on the asset class and stock market which will likely to be the outperformers in 2014 and in my post on Feng Shui and Stock Market Forecast 2014 - Part II, I made my forecast on the various industries/sectors which are likely to be outperformers in 2014.  In this post, I focused on the timing of a market correction in the US stock market in 2014.

At the time of writing, almost all investors are wondering when the big correction in the US stock market will arrive.  It has been more than a year since the Dow or S&P 500 has seen a correction of 10% or more.  Here, I shall use the monthly Flying Stars in an attempt to assess the likelihood of the US market having a correction in the first half of this year. 

January looks like a safe month for the market. The monthly Star No 1 forms an auspicious combination with annual Flying Star No 6 in Northwest.  In February, the annual 2014 Flying Star starts to kick in, and Northwest sees annual Flying Star No 5 combining with monthly Flying Star No 9.  As this is an inauspicious combination, there is a good chance of a stock market correction during this month.

March, April and May look like safe months for the US stock market and a major correction in either of these months is unlikely.  The star combinations of 5-8 and 5-6 in March and May respectively signify that the stock market is likely to do really well during these two months.  In April, the Metal Element of Monthly Star No 7 will also reduce the negative Earth influence of Annual Star No 5.  April is not a good month but a major correction during the month is not probable too.

In June, the double 5-5 star combination comes into play.  This combination is rather inauspicious and it is likely that a major correction will take place this month.  In July, the star combination is 5-4 which is also an inauspicious combination.  But monthly Star No 4 combines with Period Star No 9 to form a Metal combination which reduces the negative influence of Annual Star No 5 and enhances the Metal Element of the Northwest sector.  Thus, any correction in June is unlikely to last into July.

To summarize, February and June look like bad months for the US stock market. March and May are probably the best months.  A major correction in US stock market is unlikely to last long as the negative months are followed immediately by auspicious months.

Looking from the lens of a financial investor, the appointment of the dovish Janet Yellen is bullish for the global stock markets. The new Fed Chairwoman will chair the first Fed meeting in March. Should there be a meaningful correction in the US stock market in the February, it is likely that the new Fed Chairwoman would put a pause in the tapering of bond purchases or give a positive forward guidance to pause the tapering in the coming months.  If markets do not correct in February, non-farm payrolls might disappoint again after coming in way below consensus in December. Either way, the period from March-May looks like a good one for the US markets.  

Conclusion: 2014 promises to be another good year for global stock markets in general.  Though the US market is likely to underperform other stock markets, the probability of a major crash is unlikely, especially in the first half of the year!

Update: Compare my monthly stock market forecast with CLSA Feng Shui Stock Market 2014 Review.

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