Year of the Snake and the Chinese 19-Year Lunar Cycle

By Lawrence

Happy Chinese NewiStock_000014214544XSmall Year!

Isn’t it funny that even though China has adopted the Western calendar for so many years, yet the Chinese New Year celebration never goes away.

Every year during this time, all kinds of fortune telling shows pop up in Asian TV, radio, and mainstream media.

Here is my version of the fortune telling game.

Chinese calendar follows a distinct solar / lunar cycle combination that repeats approximately every 19 years. You hear me right. It is not 10, 12, or 60 years that are well known among the Chinese astrologers. This 19 year cycle has a few interesting properties making it very useful for mapping out lunar eclipse and other astronomic events.

This 19 year cycle is known for its ability to map out the weather cycle accurately. For example, this year we just experienced the biggest snow storm over the past 19 years. Interesting?

Here is the Dow Jones Industrial Average average percentage change projection based on this 19 year cycle using data going all the way back to 1928. The chart is a projection of the price movements starting from Feb 4th over 12 month period.

Dow Recurrence_20130210_234857

Notice the start day on the chart is Feb 4th which is usually within 1 day of the actual start of the Chinese New Year. I know the widely published date is Feb 10th, 2013 this year. That is just the 1st new moon of the year

The reason why I choose to use percentage change projection is that the older Dow data are in the low 100s while the latest data is in the range of 10K and more. If I use the raw data as is, the older data will have no impact on the projection chart at all.

This chart raised a very interesting point that I did not expect.

I am bearish for quite some time already. That is pretty well known among my site members. My projection is that sometime this year, probably by 2nd half of this year, we should have developed a long term top. However, on this chart, the top is made in July / August. The key to this blow off top, right from the chart,  is how the market going to play out by late June 2013.


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