Big Bear Markets: More Than Falling Stock Prices
by ilene - June 16th, 2010 5:12 pm
Big Bear Markets: More Than Falling Stock Prices
Many infamous authoritarian regimes emerged during or after big bear markets
Courtesy of Elliott Wave International
Fear and uncertainty that drive a severe bear market are the same emotions which can set the stage for authoritarianism, in most any nation.
"Bear markets of sufficient size appear to bring about a desire to slaughter groups of successful people. In 1793-1794, radical Frenchmen guillotined countless members of high society. In the 1930s, Stalin slaughtered Ukrainians. In the 1940s, Nazis slaughtered Jews. In the 1970s, Communists in Cambodia and China slaughtered the affluent. In 1998, after their country’s financial collapse, Indonesians went on a rampage and slaughtered Chinese merchants." - Bob Prechter, Wave Principle of Human Social Behavior, p. 270
Why do authoritarian tendencies emerge only during bear markets in stocks?
"As society becomes more fearful, many individuals yearn for the safety and order promised by strong, controlling leaders." - The Socionomist, May 2010
Bob Prechter’s new science of socionomics explains that stock market fluctuations mirror trends in people’s collective mood. In simple terms, when the market is buoyant, it indicates positive social mood; the opposite when a bear market takes over.
The fascinating part is that because the stock market and social mood trend closely together, a forecaster can apply Elliott wave analysis to both — and predict both.
Generally, widespread brutalities and wars do not follow the first phase of a bear market. Extreme violence, when it does occur, often follows the worst part of the market’s downturn — like the end of the Great Depression, a negative social mood period that ultimately ushered in World War II.
But even during the first phase, a negative social mood grows. So, if a forecaster determines correctly where in the wave structure social mood resides, he can make educated forecasts about what will follow in society — given what has happened before under similar social mood trends.
Authoritarianism is a subject of heated discussions these days, which makes it a timely topic for a socionomic study. The latest, two-part issue of the monthly Socionomist gives you just that: A look at historic trends and specific forecasts for the years ahead.
Learn How to Anticipate and Prepare for Political Conflict and War, Bull Markets and Bear Markets. The 118-page Independent Investor eBook covers a vast array of investment topics and exposes myths that mainstream investors accept as fact. Once you learn…
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Will the Bear Market End the “War on Drugs”?
by ilene - April 26th, 2010 12:25 pm
Will the Bear Market End the "War on Drugs"?
Marijuana legalization has come a long way (in a short time), baby
By Robert Folsom, courtesy of Elliott Wave International
In 1996 California voters approved Proposition 215, which extended legal protection to doctors who recommend and patients who use marijuana for medical reasons. This inspired the "medical marijuana" movement, though it made only sporadic progress in the decade that followed. Beyond a few mostly Western states, the movement found meager legislative support.
Until around 2007, that is.
In 2007 and 2008, legislatures in 27 states considered bills related to marijuana — each one sought to relax or eliminate the current penalties for use and/or possession in those states. The trend continued into 2009 and 2010. This past March saw the most far-reaching legislative proposal yet, again in California: the state legislature will vote on a bill to allow adults over 21 to personally possess and cultivate marijuana. It would also implement a regulatory regime that taxes pot sales by licensed vendors.
The trend itself may not be news to you, even if you don’t know all the particulars. This past January, an ABC News/Washington Post survey found that 81% of Americans support the legalization of medical marijuana (up from 69% in 1997). The same survey found 46% support "legalizing small amounts of marijuana for personal use" (up from 22% in 1997).
Still, you may not have gotten the memo about this past Tuesday (April 20) and the event known as 4/20, aka "Pot Day." Participants made a public show indeed of how much this day means to them: behold the crowd gathered for the occasion on the campus of the University of Colorado.
Yes, that cloud is exactly what you think it is.
This apparent willingness toward tolerance and use also extends to controlled substances which create clouds only a user might see. Earlier this month The New York Times reported the experience of a retired clinical psychologist who was deeply depressed while going through treatments for kidney cancer:
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What Can Movies Tell You About the Stock Market?
by ilene - March 15th, 2010 6:13 pm
What Can Movies Tell You About the Stock Market?
Courtesy of Elliott Wave International
The following article is adapted from a special report on "Popular Culture and the Stock Market" published by Robert Prechter, founder and CEO of the technical analysis and research firm Elliott Wave International. Although originally published in 1985, "Popular Culture and the Stock Market" is so timeless and relevant that USA Today covered its insights in a recent Nov. 2009 article. For the rest of this revealing 50-page report, download it for free here.
This year’s Academy Awards gave us movies about war (The Hurt Locker), football (The Blind Side), country music (Crazy Heart) and going native (Avatar), but nowhere did we see a horror movie nominated. In fact, it looks like Sweeney Todd, The Demon Barber of Fleet Street was the most recent to be nominated in 2008, for art direction (which it won), costume design and best actor, although the last one to win major awards for Best Picture, Director, Actor and Actress was The Silence of the Lambs in 1991.
Whether horror films win Academy Awards or not, they tell an interesting story about mass psychology. Research here at Elliott Wave International shows that horror films proliferate during bear markets, whereas upbeat, sweet-natured Disney movies show up during bull markets. Since the Dow has been in a bear-market rally for a year, now is not the time for horror films to dominate the movie theaters. But their time will come again.
In the meantime, to catch up on why all kinds of pop culture — including fashion, art, movies and music — can help to explain the markets, take a few minutes to read a piece called Popular Culture and the Stock Market, which Bob Prechter wrote in 1985. Here’s an excerpt about horror movies as a sample.
* * * * *
From Popular Culture and the Stock Market by Bob Prechter
While musicals, adventures, and comedies weave into the pattern, one particularly clear example of correlation with the stock market is provided by horror movies. Horror movies descended upon the American scene in 1930-1933, the years the Dow Jones Industrials collapsed. Five classic horror films were all produced in less than three short years. Frankenstein and Dracula premiered in 1931, in the middle of the great bear market. Dr. Jekyll and Mr. Hyde played in 1932, the bear market bottom year and the only year that a horror film
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Social Mood, Stocks and Epidemics
by ilene - May 14th, 2009 11:19 am
As we’ve discussed previously (e.g., Global Unrest Continues to Grow, Hyperinflation First, Then Global War), socionomics is premised on the theory that "social mood drives financial, macroeconomic and political behavior, in contrast to the conventional notion that such events drive social mood." Here is an interesting article on socionomics which focuses on social mood and its relationship to disease. – Ilene
Social Mood, Stocks and Epidemics
As you can see in the chart of the MSCI World Stock Index below, there are similarities between the 2003 SARS epidemic and today’s flu outbreak.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site