Social moods definitely have a direct effect on the direction of the markets. Social mood is nothing but a shared mental state among the masses that takes over future events completely. These events , when they occur do look accidental but are predictable in one sense. A chain of events will always precede a major event Further these chain of events are always effected by a shared mental state among the masses , that takes over future events completely. Stock markets showing exuberance in raging bull markets and extreme pessimism in depressed markets do showcase the underlying social mood. The question of course may arise whether the social mood effects the markets or the other way around. Maybe the answer lies somewhere in between.
Probably that is the reason why it is most important to be acutely aware of what is happening around the world in order to become a good technical analyst. The changes which occur around us take place in a slow regimented way where we get used to events and do not really contrast with our ‘present’ way of thinking. Major occurrences which may have happened long time back recede far back into the mass subconscious. All elliot waves have their unique characteristics. As we know , the final wave or the wave 5 is the most important to us as this is the final culmination of the upmove and from here will start the total annihilation of the markets and start of acute social unrest.
The above is of course open to individual interpretation where we try to determine if the world is moving towards total chaos or there is hope for peace in the near term. It is my contention that the major problems of the world will be sorted out for now and we will receive a medium term respite thereby moving towards the wave 5 on the elliot wave scenerio.
In order to get to the correct social mood, we will take the present scenario both political and economic which is unfolding in the world. We will start with the last 6 years, as we need to pin down the present unfolding market wave
1. Trump coming to power. Start era of social unrest. 2. Trade Wars 3. Start of racial profiling in USA 4. Hong Kong unrest 5. North Korea 6. ISIS in Afghanistan 7. Removal of 370 in Kashmir 8. Iran thumbing his nose at USA. 9. Pakistan unrest. 10. China Muslim unrest 11. Turkey moving away from Nato 12. Brexit. 13. South America unrest 14. France unrest. The easiest way to determine the future course of the markets is by asking the question- will the above events morph into any major war. My own contention is No. Therefore we can consider the present wave down in our technical analysis as wave 4 , which will finish around 9000 on the nifty. This may take about 2-3 months or even a little longer . From there should start the final wave 5 and will be the final run of the bull markets.