> >>>EWT founder Robert Prechter argues that you can analyze the stock
>>>>market by following cultural trends. Punk is bearish. Girl groups are
>>>>popular during corrections.
>
>Victor Neiderhoffer, in Education of a Speculator, explains cogently why
>mapping two stock charts together and discovering "similarities" is often
>just looking at random noise. Much less plotting the Dow to something
>unchartable like punk.
Hmm, well, I think Prechter may have a point. If you accept the point that stock markets reflect popular moods, and you accept the fact that pop culture has something to do with popular moods, then you can't dismiss the possibility that stock markets and pop culture would show some correlation. Stock markets thrive on euphoria and optimism - in contrast with commodity markets, as Prechter's also argued, which peak on fear (of shortage, etc.). Punk thrives on anger and something like nihilism ("No future for you!"). Of course it's sometimes ironized, and usually marginal, but it flourished in the 1970s, receded in the 1980s (sure there was hardcore and all, but it was a lot more obscure), and had a renaissance in the gloomy/anxious early 1990s in grunge, riot grrrl, other indie bands, and then receded as the Clintonian bull rose. Maybe Bush and the bear will bring it back again.
Charts are another story. Burton Malkiel exposed some technicians to some charts he'd randomly generated, and they found their usual pennants, double bottoms, and rising wedges anyway.
Doug