Does Crude Oil Signal a Mood for War?

The news can be a part of the story that goes along with where the market was already heading, but it's the mood or sentiment that is the cause.  I've noticed over the years that when crude is pointing up and the market is pointing down (per the mood generated forecast) that this is usually accompanied by Middle East geopolitical escalation.  That's why I said in Sunday's report (at Elliottwavetrader.net), "The {crude} chart implies at least the potential of a large bullish turnaround. Gearing up for some Iran/Syria news, maybe?"  There were already tensions when I posted that, but as long as I've been watching this, it appears that crude always goes up first before military action is taken (in the Middle East).  This is the Socionomic premise: mood => markets => news.

We like to have a reason why to explain what is happening in the markets.  If there is a final spike in crude and sharp drop in the stock market, perhaps it will be blamed on concerns about WWIII.  Yet, Avi Gilbert of Elliottwave.net was posting months ago about a 4th wave that would look like a scary crash.  Was he psychic?  It's simply that it's the pattern of things.

Elliott Wave Theory can tell you that at some point soon a large, sharp bearish move is likely.  These stock market patterns are displays of the general shape of our collective ups and downs.  At some point prior to major news or the next big market move, it will start to show up in what we are collectively focusing on, e.g. internet search trends.  The MarketMood model uses an algorithm to convert this into market movement for the stock market, gold, oil, and the U.S. Dollar.  The market will then reflect the social mood in how it moves, and finally, the news will conveniently provide a background story to give us a reason why (because we like to point to something "out there" as to why these things are happening).  Yet, wars will happen, it seems, only when the mood is right.

Market moves, mass casualty events, epidemics, and even natural disasters appear to follow the mood, not precede it.  I don't know that it can be stated unequivocally that our mood causes all of these things.  However, it does seem to precede them.  Socionomics, Elliott Waves, and the MarketMood model, are all based on this premise.  Social mood follows general patterns, which can be traced in the market.  Certain types of news are associated with specific mood patterns and Elliott Waves.  News doesn't cause any of it, it's just part of the background story that we point to "out there" to explain what was already in progress.  This is not how we are accustomed to thinking about our world, but it has been demonstrated over and over again, that this is indeed the way of it.  If you want to make news the cause of it, then perhaps you could say, "A possible war we don't know about yet, will cause crude oil to rise next week, and is causing us to focus on things today that resonate with that on the internet."  If that sounds a bit silly, then just stop saying the news is causing the market to move, or the future news and market moves are causing what we are thinking about or caring about today.  That would be a start.

The Next Crisis Wave Approaching?

(click to enlarge)

Back on 24 February, we posted our observation that globally, the risk for violence and war was on the rise.  It seemed somewhat preposterous, as the news was all about diplomacy and cooperation (Iran negotiations, Syria destroying weapons, etc.).  Yet, that is what the patterns in social mood were displaying.

On 28 February, we posted World in Crisis, U.S. government and people not immune.  Hours later, the Ukraine crisis was in the news.  There were indications in our data of an approaching major disaster in scale, but little to no U.S. casualties were projected as likely accompanying this.  For that reason, we called it a crisis, not a disaster.  Also, from the social mood pattern, we determined the type of crisis projected is type NE.  From the post: "The most likely types of events that show up with type NE are an economic disaster, an attack from another geopolitical entity, or if a natural disaster, a winter storm.  It’s also associated with anxiety and risk aversion."

By 5 March, we noticed that the charts were showing that this crisis had still not had a substantial U.S. impact, and did not get the telltale "disaster pressure" relief indicated by orange lines on the chart above.  We posted the date information of 6-13 March as the likely time-frame for this.  During the period of 7-14 March, markets were down in what may be the initial warnings of a much larger decline.  The relief of "disaster pressure" has shown up in the charts, yet the crisis is not over, nor has it yet had a substantial U.S. impact.  During the time period under watch, background disaster-type events were showing up, yet they were not of major U.S. impact: a Malaysian airliner disappeared over the ocean, a U.S. building exploded from a gas leak, several people were killed when someone crashed their car into a stage, and earthquakes in Northern and Southern California not causing much damage, but causing concern and making headlines nevertheless.  The scale of all of these events appear to be "disaster precursors."  They show up near major disasters or crises, but aren't the main event.  For this reason, we have colored the area of 7-14 March yellow on the chart.

If there are much larger U.S. impacts still developing in this very complex pattern, we would expect the line on the chart to turn up over the next few days, and to remain above the horizontal black line at the right side of the chart.  Things would tend to get really bad as the curve reached its top again, likely in another week or two.  Stay tuned.

2014 Global and U.S. Overview

Projecting forward the cycles of collective mood and perception for 2014 gives us the following likely scenarios (at the end of this post is a link to download more complete info).

Global:

    March/April –Fuel Prices Soar on Iranian Nuke issue

    May/June –Uncertain Response Inflames Israel

    August –Iran Deal Proposed (Hillary-style)

    September –CPI Remains High, Markets Choppy

    October –Incumbents Worried

United States Government:

    Primary themes of bickering, inaction, indecision, and confusion

    March/April - U.S. government in crisis mode

2014 and You -- see the presentation pdf

Feel free to download your copy of the MoodCompass team's overview of 2014 here.
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Update 16 January '14 A Bill Stokes Debate, and Doubt, on Iran Deal