DJIA_Update and Socionomic Comments_12_13_2012

I was pleased with yesterdays prediction, as the market traced it extremely closely in completed wave -d- (blue). It still has to fill out sub-minor waves b and c (black) to complete wave -e- (red), which should also be wave [b] (black).

61.8% of the length of minor wave a (black) of -e- (red) would bring the bottom of -e- (red) to ~12,372. This is an alternate low however, since the baseline resistance should be found again at $12,410. Again, given the strong building downward pressure of the larger wave cycle, -e- (red) ending ~12,372 is very feasible.

After wave -e- (red) / [b] (black) completes, an upwards moving C wave will likely bring the market up to ~$12,840 in a simple 5-wave structure which I will channel more accurately upon the completion of sub-minor wave 1 of that larger [c] wave. 

[Socionomic Observation]

For a brief socionomic correlation to the overall market sentiment, check out the two following videos. The most recent video "Someone I use to know" features a simple recurring / descending melody in the key of D minor with a high C acting as a leading tone for a sixth which then falls to the fifth before finally descending again to the tonic of D. In English, this is what is typically regarded by listeners as a REALLY depressing scale. The bleary eyed nude male singing the lyrics face on recalls in his lyrics a relationship that has passed. Expressing nostalgia however he seems to note that it wasn't a very good experience even before the now nostalgically recalled. At one point he declares " I am addicted to a certain kind of sadness". Since this song is at the very top of the present charts, I don't think it is a stretch to say that mass social mood is identifying and reflecting an emotion that correlates with the present and coming Bear markets. While this is obviously just something that I have picked out, I would argue that the same general sentiment can be found across the most popular songs since late April of 2011.  

As a measure of comparison, take a look at what is generally popular in terms of styles of music today and compare it to the "Swing Revival" of the late 1990's, which hearkened back to the start of Bull market cycle wave III in the early 1940's. Social mood in 1997 /1998, the peak years of the past century's bull market 5-wave sequence, produced the following sound.

The "Zoot Suite Riot" begins with a forceful brass blasting set of saxophones (which barely fade throughout the song), also in a minor key (G), but resolving the major second of that key in an ascending form and heavily complemented by an incredibly colorfully dressed front man. Smiling and dancing, the singer encourages the listener to "throw back a bottle of beer" and advises that "you can't run fast enough". While this is a far cry from today's mostly dark / passive hits, it seems very in line with mass social mood in 1997/98.

One last thought. While "Someone I use to know" centers around the idea of individuals who share a relationship alternatively fading into the background....literally, "Zoot Suit Riot" features a very strong individual singer whose ecstatic confidence is made plain and who is centered by a spotlight. Popular advocacy of individual achievement is also tied with Bull markets, while more collectivist mentalities are expressed during societies more fearful and pessimistic times.. i.e Guilded age vs. Great Depression.

- W