Hi folks, Chinese New Year is around the corner. Have a short count, it has about 8 more trading days to go. So you must be thinking that most of the people will take profit before they go back hometown for celebration? Well, I believe it does make sense to me, because Chinese do celebrate CNY and it needs a lot of money to do so.
But let's come to think about it, the market is corrected quite bad these 2 weeks, are there many people really have much profit to take? And if they do, they should already withdrew on last 2 weeks ago (a month before CNY). This also make sense to me. To verify further, let's check the past years statistics as a guideline whether it will be a good buy before or after CNY.
From the graph above, it shows the historical performance of past 14 years, 1 month prior to CNY. It is gaining in 11 out of 14 years, or 79% on positive side.
From second graph above, it shows the historical performance of past 14 years, 1 month post CNY. It is only gaining in 8 out of 14 years, or 57% on positive side.
Based on the historical statistics above, perhaps it advices us to take profit on next Friday, and stop trading 1 month post CNY? Just kidding. To follow or not, it's all your choice.
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