2002 annual forecast.

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Water Horse year: 2002 annual forecast.

(February 2002)

For the last two years, we have correctly predicted the decline in the stock markets, based on Chinese astrology ( Click here )

Meanwhile we have done a more detailed study based on 200 years of stock data.
We will use this research to shed some light on the year to come.

Studying the 200 years of data we noticed that there tend to be 'strong' decades, during which stocks rise strongly, and 'weak' decades when stocks remain flat or go down.
Comparing the average yearly performance (S&P) in good and bad decades, we found this:

We notice that, both in strong and weak decades, the Yin Wood (xxx5) and the Yang Earth (xxx8) years tend to show the best performance.
We also see that in weak decades it is especially the Yang Wood (xxx4) year that tends to disappoint : instead of rising strongly we get a decline.
We could compare this to agriculture : if the growing season (= Wood) fails or starts too late, the harvest is going to be below average ( = the decade will be weak)

Given the 2 very good decades that preceded (1980 - 1999), and the decline we have seen so far in this decade, it is more likely that we are in for a weak decade.
That means we probably better take the blue curve (see picture) as a guide for the future.
The Yang Water (xxx2) years tend to be flat on average during weak decades, that means they can go either way.
So, we expect the market to be in consolidation mode (moving sideways) for most of 2002, before drifting lower again in 2003 and 2004.
That would also fit in very well with what we learn from the updated long term chart ( Click here )

With the Metal months just behind us, we look for upward bias in the markets at least until May, possibly until September. Then we have Metal months again in October and November, so we will go on crash alert if the market has held up so long.
The current Nasdaq short term outlook shows it in a nutshell:

So, we expect the market to be slightly up by mid year, but slightly down by the end of 2002.

Any changes in this outlook will be discussed in the free Newsletter

Disclaimer: Investing in stocks is risky. No guarantee can be given that the above prediction will be correct. Fourpillars.net cannot in any way be responsible for eventual losses you may incur if you trade based on the information given in this article.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. This information should not be considered as a recommendation to engage in the purchase and/or sale of any futures contract and/or options. Trade at your own risk.

Disclaimer: Investing in stocks is risky. No guarantee can be given that the predictions given on this site will be correct.
Fourpillars.net cannot in any way be responsible for eventual losses you may incur if you trade based on the information given on this site.
Hypothetical or simulated performance results have certain inherent limitations.
Unlike an actual performance record, simulated results do not represent actual trading.
Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity.
Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
This information should not be considered as a recommendation to engage in the purchase and/or sale of any futures contract and/or options.
Trade at your own risk.