Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

Popular Culture and the Stock Market

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Here is a popular Excerpt from Robert Prechter during, 1985’s. . Here is the content and enjoy the reading

Popular Culture and the Stock Market

Most people believe that stock market movement is caused by fundamental economic and political conditions and events. Experienced stock market watchers have recognized that such events “cast their shadow before” on the stock exchange. However, the assumption even among veteran market students is that the stock market foreshadows events because “smart money” is correctly guessing future events. This report is an attempt to lend some justification to an alternate explanation. The reasoning is as follows:

1) Popular art, fashion and mores are a reflection of the dominant public mood.

2) Because the stock market changes direction in step with these expressions of mood, it is another coincident register of the dominant public mood and changes in it.

3) Because a substantial change in mood in a positive or negative direction foreshadows the character of what are generally considered to be historically important events, mood changes must be considered as possibly, if not probably, being the basic cause of ensuing events.

Both a study of the stock market and a study of trends in popular attitudes support the conclusion that the movement of aggregate stock prices is a direct recording of mood and mood change within the investment community, and by extension, within the society at large.
The stock market is the best place to study mood change because it is the only field of mass behavior where specific, detailed and voluminous numerical data exists. It was only with such data that R.N. Elliott was able to discover the Wave Principle, which reveals that mass mood changes are natural, rhythmic and precise. The stock market is literally a drawing of how the scales of mass mood are tipping. A decline indicates an increasing “negative” mood on balance, and an advance indicates an increasing “positive” mood on balance.

If mass mood change is indeed the cause and its manifestation a visible indicator of coming social events, then evidence of mood change is the single most important area of discovery for those who wish to peek into the future of social events.

In the world of popular culture, “trendsetters” and the avant-garde must be carefully observed since their ideas are often an expression of the leading edge of public mood. Trends in music, movies, fashion, literature, television, popular philosophy, sports, dance, automobile styling, mores, sexual identity, family life, campus activities, politics and poetry all reflect the prevailing mood, sometimes in subtle ways.

Although the stock market would probably remain the single best indicator because of its reliably precise measurement of mood and mood change, other social phenomena could be detailed, numericized and studied, and used to forecast social events and even changes in the mood trends themselves when extremes are achieved. …

Rajandran R Founder of Marketcalls and Co-Founder Algomojo. Full-Time Derivative Trader. Expert in Designing Trading Systems (Amibroker, Ninjatrader, Metatrader, Python, Pinescript). Trading the markets since 2006. Mentoring Traders on Trading System Designing, Market Profile, Orderflow and Trade Automation.

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