Though I profess a love hate relationship with the fatalistic Elliot Wave Social Mood Theory, the correlation between the cycles in the stock market and corresponding cycles in geopolitical unrest are difficult to explain away. Right now, we are seeing tensions in almost every corner of the globe. Those tensions will ratchet up incrementally as the stock market is ascending, and then explode on the other side of the decline. Wars make the best spectacle and the best youth employment program during periods of economic contraction.
So far, we are witnessing exactly the magnitude of geopolitical tension building that we should expect at what the Elliot Wave folks tell us is a multi-decade peak in the stock market (if not in nominal terms, certainly in inflation-adjusted terms). It's all just another confirmation that the burgeoning yet widely ignored risks that we are now witnessing, are real and not a figment of the imagination.
