2019 February Forecast for Fun Fest

It is a tradition of this letter that every year, about this time, we explore some of the fun methods of forecasting the coming year. Some have shown to have some statistical merit and some are just for fun. This year, we will explore the Chinese New Year and Chinese Astrology, the January Barometer, and the Super Bowl Stock Market indicator.

The Chinese New Year will begin on February 5. “Investors: Get Ready for the Year of the Pig -Raymond Lo, Master of Feng Shui – “Last year he wrote that in October 2018, the water element would replace fire and we would have the start of a bear market. I wish I could tell you that he is more optimistic for this year. He is not. He begins this year’s thoughts with, “The yin earth element of the pig is sitting on water. Besides predictions of “earthquakes, landslides, collapses of buildings and avalanches”, he sees “flooding and heavy rainstorms.” His quote: “As water symbolizes fear, there is a lack of optimism in the Pig year and it will bring decline in economic growth and activities leading to longer term setback of the stock market and more economic crisis will come up. As there will not be return of fire year until 2025, we expect a long-lasting bearish market ahead.”

Looking back, the previous Pig year was 2007, when signs of trouble in second mortgage business started to emerge leading to the financial tsunami in 2008. Nevertheless, Lo has some comments on industries that should do well. “The industries that will perform well in the year of the Pig will be industries related to Wood element and Earth element. Wood industries are environment, fashion, media, books, education, plants and flowers. Earth industries are property, insurance, mining, high tech.” Lo says the areas that will not do well are shipping, transportation, and communication. He also predicts banking, machinery and cars as weak sectors. Lo ends with,“It is a year facing the conflict between water and fire according to the Chinese Zodiac. This will be a year for investors to focus on limiting losses rather than chasing large gains.”

Source - https://www.seeitmarket.com/investors-get-ready-year-of-the-pig-18928/

Two historically accurate forecasting Stock Market models are the January Barometer and the Super Bowl Stock Market Indicator. Be sure to check out the new January barometer charts near the end of this letter. There was not enough time to include the Super Bowl charts, as this letter is being written as the game is being played. Those charts will be in the March letter. The January Barometer forecasts an up or down year based on whether January is an up or down month. This has been shown to be statistically 75% accurate since 1950. January 2019 closed sharply higher than where it began, so this suggests that 2019 should be an up year as of the end of the year.

The Super Bowl Indicator is based on who wins the Super Bowl. The National Football League is divided into two conferences, the NFC and the AFC. The champion from each conference meets in the Super Bowl to determine the NFL Super Bowl Champion. The pattern since the inception of the Super Bowl in 1967 is that if the NFC team wins, this is bullish for the Stock Market, indicating an up year, and if the AFC team wins, this is bearish for the Stock Market and indicates a down year. I know this sounds crazy, but it has worked over 80% of the time. This year, the Super Bowl was be played on Sunday, February 3, between the NFC Los Angeles Rams and the AFC New England Patriots. Given that the January Barometer also forecasts how the Stock Market is likely to close the year, I have a theory that we can use the January Barometer to also forecast the winner of the Super Bowl. I did this successfully in 2018 to forecast that the Philadelphia Eagles would upset the heavily favored New England Patriots. Given the strong up January 2019, I forecasted that the Los Angeles Rams would defeat the New England Patriots to win the 2019 Super Bowl. Super Bowl Results – The New England Patriots won, 13 -3, marking a miss for my theory and a bearish indication for the Stock Market for 2019. We now have mixed signals with the January Barometer pointing up and the Super Bowl Indicator pointing down. We will have more details in the March letter.

This is an excerpt from the Astro Trend newsletter. Astro-Trend covers about thirty futures related markets including the major Financial Markets, such as the Stock Market, T-Bonds, Currencies, and most major commodities. We also offer intra day data which identifies potential change in trend points to the minute.