Stock Markets
99hotat an extreme
171% above its 10-year average | Data for Aug 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
The monthly average of the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX), as compiled by the central bank.
With a heavy weight in semiconductors, it rises and falls with US tech stocks and global demand for electronics.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also hot
Short sample: positions start only in 2007 (less than 30 years), so conclusions should be more cautious.
When it was here before
Taiwan stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every hot month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened next
Bars: median cumulative changeEarlier months with Taiwan stocks hot, excluding the current period (33)All months (234)
Median of the deepest drop below the starting month within the next 5 years: −16.5% for months with Taiwan stocks hot; −7.4% for all months.
The hot months come from a small number of market episodes (3), and neighboring months are not independent events; rises and falls are all listed. This is the historical record, not a forecast.
| Median position | Back to neutral (40–60) | Still hot or more extreme | |
|---|---|---|---|
| 1 yr later | 55neutral | 52% | 9% |
| 3 yr later | 88hot | 3% | 58% |
| 5 yr later | 55neutral | 42% | 33% |
Has hot or cold lined up with later returns?
2007–2021: average yearly change in Taiwan stocks over the next 5 years
There is no clear relationship between hot or cold and what came next. The gaps between the bars are not consistent across months (rank correlation below 0.25); this is a record of the past, not a forecast.
What it is linked to
Taiwan export orderstoTaiwan stocksCommon explanation: Knock-on · same direction
Export orders and share prices are both leading indicators, turning before the economy does
This issue: Taiwan export orders at 99 (hot), Taiwan stocks at 99 (hot) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.59 · in step in 15 of 15 5-year periods
US stockstoTaiwan stocksCommon explanation: Ripple · same direction
Electronics and semiconductors make up a large share of Taiwan’s market, which moves closely with US stocks
This issue: US stocks at 94 (hot), Taiwan stocks at 99 (hot) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.62 · in step in 14 of 15 5-year periods
USD/TWDtoTaiwan stocksCommon explanation: Ripple · Taiwan dollar strengthens, Taiwan stocks rise
Foreign money flowing in lifts both the Taiwan dollar and Taiwan stocks
This issue: USD/TWD at 76 (warm), Taiwan stocks at 99 (hot) — both above normal, not in line with the common explanation (this is an inverse link).
Not visible in our dataAgreement +0.03 · in step in 14 of 15 5-year periods
In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.
Values
Data and sources