The spread of bird flu is again dominating European headlines. The disease is reportedly spreading in poultry across the EU and in several Asian and African countries; another person has died from the “aggressive N5N1 strain” in Iraq, bringing the global death toll to at least 91 people.
European governments are taking the threat seriously. The British have already stockpiled almost 15 million dozes of anti-flu drug Tamiflu; the French ordered “about 200 million protective masks and enough anti-viral drugs for everyone in France” (BBC); Germany and Bulgaria tightened border controls. And although “veterinary experts say the risk of transmission to commercial poultry and to humans in the EU is substantially less than in East Asia…if a catastrophic pandemic occurred tomorrow, everyone in the world would be unprepared" (The Wall Street Journal).
When R.N. Elliott first discovered Elliott Wave Principle back in the 1930s, he applied it only to forecasting the financial markets. But later, Elliott’s successor Robert Prechter observed that trends in the stock market reflect much more than just stock prices.
First and foremost, the stock market mirrors the ups and downs of society’s overall mood state – or social mood.
In a nutshell, a rising (“bull”) stock market indicates improving social mood, while a falling (“bear”) market signals that society’s mood is worsening. Bob Prechter documented multiple cases demonstrating that how a society “feels” has a major impact not only on the stock market, but also on the whole of our collective lives. For example, there is a clear correlation between bull and bear markets and trends in music, fashion, politics, sports, religion, and many other social and cultural manifestations.
You’ll be surprised, but our research also strongly suggests that throughout history, there’s been a definite correlation between disease epidemics and bear markets.
When we look at epidemics such as the ones that occurred during and after the fall of Rome; the Black Death (Bubonic and Pneumonic Plagues) of 1350-1400; famine and cholera pandemics in Britain in 1825-1849; the influenza epidemic of 1917, etc. – “there always appears to be a bear market in force, and the extent of the epidemics tends to correlate with the size of the setback in [social] mood,” says Prechter.
We’re still examining several theories that may explain why epidemics tend to break out during bear markets in social mood. But the fact remains: “Epidemics and pandemics seem to hit populations during major negative social mood trends.”
Can the growing threat of a bird flu epidemic stop the ongoing rallies in European bourses? Don’t bet on it until you see our latest European market forecasts. Read them risk-free right now – just click on the buttons below.