Brazilian Bovespa, Indian Sensex, Malaysian KLCI

Over the next 10 years there are certain countries (largely emerging markets) with demographic tailwinds which should enable strong equity bull markets (as per my conclusions here), whilst the majority of the G10 face demographic headwinds, which may not only offer poorer returns but potentially even losses in secular bear markets, like Japan 90-00. So I want to put greater focus on the site going forward on my pick of those with tailwinds.

Out of the 24 I studied, South Africa, Nigeria, Poland, Russia, India, Turkey, Brazil, Malaysia and Indonesia had the best demographics looking foward. Out of these I have chosen Brazil, India and Malaysia to track on my site. I selected them because of relatively low corruption, sufficiently diversified economies, and healthy reserves versus debt. Brazil has an advanced tech sector, good oil supplies and one of the richest biodiversities. Equally important was having access to them on my trading platforms and having access to the data for their respective indices. I would have liked to have added one of Poland or Turkey to make even better geographic diversification, however data for both is not readily available. I plan to still invest in one or the other – most likely Turkey – but will limit the modelling on my site to Brazil, India and Malaysia.

Of course having positive demographic trends does not make for guaranteed good returns. Political and economic mismanagement, conflict, regional crises, large natural disasters and a number of black swans are all possible. But all three countries are fairly established and large economies, on the cusp of leaving emerging to becoming developed, and my plan is to spread my risk by investing in all, with the addition of Turkey or Poland, in case one stumbles.

So, I have compiled data for the last 4 years: sufficient to judge lunar and geomagnetic responsiveness, whilst balanced against time demands. Here is the geomagnetic model for the last 4 years versus Brazil, India and Malaysia stock indices:

a40

a42

a43

All three demonstrate fairly good relations with the geomagnetic model. It is tentative of course, but none are so out of sync with the model as to render its use redundant, and this is largely to be expected as geomagnetism should affect sentiment globally. The geomagnetic forecast and models will be updated tomorrow as usual, so these three will now join the updates.

I then studied returns in relation to lunar phase oscillation over the last four years and here is the summary:

13may20131

All three countries demonstrated higher returns within the lunar positive period (buy on the 4th day after a full moon, sell on the 4th day after a new moon) compared to the lunar negative period (buy on the 4th day after a new moon, sell on the 4th day after a full moon). The least powerful differential was found in Malaysia, yet in the Dichev and Janes study which covered a longer timespan, they found the Malaysia KLCI to be one of the most sensitive to the lunar oscillation. Dichev and Janes did not include India or Brazil in their study, but the results in the table above suggest fairly potent lunar oscillation, with India particularly impressive. I therefore (again tentatively) suggest trade-timing using lunar oscillation should work in these countries.

In conclusion, the Brazilian Bovespa, Indian Sensex and Malaysian KLCI have demographic tailwinds looking out over the next 10 years, which should add to the probability of strong secular equity bulls in these countries. They also compare more favourably to other positive-demographic countries, such as Nigeria, Russia and South Africa in terms of lower corruption, unemployment or more economic diversification. Collectively, they provide sufficient risk diversification and geographic diversification, to which I will be adding Turkey or Poland. However, due to data availability, my tracking on the solarcycles.net will be limited to Brazil, India and Malaysia, and all three demonstrate sensitivity to geomagnetism and lunar phasing, which should provide two tools with which to improve trading returns in these indices.

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15 thoughts on “Brazilian Bovespa, Indian Sensex, Malaysian KLCI

  1. Hi John
    If you need any help re india do let me know.

    Also sadly India has very high levels of corruption which goes all the way to the top. They also seem to be stuck politically as all the political parties are forever bickering and not much legislation gets passed due to constant walkouts of parliament.

    Regs
    Viren

  2. hi john, follow your writings religiously and quite impressed too…pls clarify one thing, the lunar positive period that you mentioned here applies both for the bull market and as well as the bear market or only one of them.

    1. Thanks. It works more often than not in bear markets too. But the positive lunar period may well return a loss if you are long – just less than the negative lunar period.

      1. Hi John. Be careful, that’s the Boulder number, which differs from the International sunspot number that is used in most solar cycle charts. The Boulder number is about 55% higher than the ISN. So if we have every day a Boulder number of 155, then at the end of the month SIDC would report a monthly ssn of 100.

  3. Have updated all models this morning. The above 3 country indices have been added to both short and medium term models. I have slightly amended the formatting on the charts with a view to making it easier for you to read the dates for timing. If you have other ideas for how they can be made more useful to you let me know, thanks.

    1. Hi John, I would have loved to see Africa represented in the models as well but you have explained your approach. South Africa is broadly considered to be the gateway to economic development into Africa…we leave it to the cycles. Love your work!

      1. Hi Shane
        And South Africa is going backward.The economic development is all talk.
        Every year since Black rule (1994) has seen more potholes .
        Infrastructure is slowly collapsing.
        Corruption is a part of doing business.
        Non qualified people are appointed to senior positions.
        The education system is the second worst in the world.
        The teachers dont understand the subjects they teach
        The health care system is third world
        I wont even start on Aids
        Blah,bla, …. more
        But there is still a highly skilled business community, strong banks, lots of natural resorces, a low cost of living and the best climate in the world.
        Thats why I live here
        regards
        bob

      2. Thanks Shane. Some of Bob’s reasons were why I shyed away from SA when making my picks. But it would be good to have some coverage of Africa. Will ponder again.

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