ON January 25, the Chinese will celebrate the Lunar New Year, when a troubled year for China’s economy and leadership ends. The incoming Chinese zodiac sign is the rat — the Metal Rat, to be exact — and a lot of good things have been said about the animal is Chinese astrology. This may seem like a relief for the Chinese economy, but if one uses the traditional Chinese calendar and zodiac in determining the economic and stock market outlook for this year, then not everything looks so rosy.
Tradition says different elements have a big impact on the economy, and water is currently the dominant elements, which indicates weak growth and a bearish stock market. The crystal bowl I use as the base for my own forecast is our conviction model for China, but neither does this model necessarily predict a new upbeat view when entering the new year.